Promoter Policy

1 Which type of Funds does the Policy apply to?

1.1   This policy applies to Jersey open-ended and classified collective investment funds offered to the general public (an OCIF) pursuant to the Collective Investment Funds (Jersey) Law 1988 and the relevant JFSC’s OCIF Guide published in November 2012 and any COBO-Only fund which has been issued with a relevant consent pursuant to the Control of Borrowing (Jersey) Order 1958 (a COBO-Only fund).

1.2   The requirements imposed in this area upon certain types of funds are set out in classification guides published by the JFSC. In these instances, the terms of the relevant guide will apply rather than this Policy (such as in the instance of a Private Placement Fund).

1.3   Accordingly, this Policy does not apply to:

1.3.1   Jersey Expert Funds

1.3.2   Jersey Eligible Investor Funds

1.3.3   Jersey Listed Funds; and

1.3.4   Jersey Private Funds.

2 Who is a promoter?

2.1   A promoter will be identified by one, or all of the following:-

2.1.1   A promoter is a person who is the driving force behind a scheme, such that, if the person were to withdraw from the proposals the scheme would not go ahead (unlike a manager or custodian who can be replaced).

2.1.2   A promoter is a person who, in the mind of the investor, is regarded as the "brainchild" behind the scheme. Examples of this may be evidenced by:

2.1.2.1 the name of the fund is linked with the person concerned;

2.1.2.2 responsibility for investment strategy/advice rests with this person; and/or

2.1.2.3 this person’s fee is a performance based fee rather than a fixed fee.

2.1.3   The majority of investors going into the fund are put into the fund by the promoter or his agents.

2.1.4   A promoter can be recognized by the roles carried out. If an organisation has responsibility for all aspects of a scheme (i.e. administration, investment and marketing) then it should be regarded as the promoter.

3 What is the Policy?

3.1   The JFSC, when considering an application by a promoter, applies the following policy:-

3.1.1   The general policy of the JFSC is to strengthen further the Island's reputation as a high quality and well regulated centre for the establishment and administration of collective investment funds.

3.1.2   When considering an application from a promoter, either under the Collective Investment Funds (Jersey) Law 1988 or under the Control of Borrowing (Jersey) Law 1947, the JFSC will have regard to section 4 of this Policy.

4 The type of investor to whom the fund will be offered

4.1   Investor protection is one of the primary reasons for this Policy. The JFSC's view of the promoter therefore will depend very much on the type of investor to which the fund is targeted.

4.2   For example, if the fund is only available for investment by professional or institutional investors who have knowledge of the industry and have the experience and resources to be able to make an informed decision regarding their investment, the JFSC might be inclined to take a relaxed view on stature. Likewise, where the fund is more widely available, the JFSC will look for greater stature.

4.3   For the purposes of this Policy the remainder of the criteria will be considered under the two headings:-

4.3.1   OCIF; and

4.3.2   COBO-Only fund.

4.4   However, it must be recognized that there are many variations of fund structure which would fall between an OCIF and a COBO-Only fund.

OCIF	COBO-Only fund
4.5   Track record and relevant experience of the promoting group
The promoter would be expected to demonstrate relevant experience operating equivalent funds in a jurisdiction where regulation is deemed to be at least equivalent to that of Jersey. This requirement will be particularly relevant in the case of specialist funds and those perceived to be high risk, for example, futures and options funds, property funds and venture capital funds. The track record of other functionaries of the fund may also be taken into account.	The position will be the same as for OCIF. However, where evidence of a track record is not available for the promoters, it may be sought in the directors and other persons behind it, who have perhaps gained such experience in previous employment.
4.6   Reputation of the promoting group
The organisation's reputation would be expected to be such that its presence in the Island would contribute to the Island's good name rather than draw from it. The promoter should be associated with an organisation it will be concerned to safeguard. The JFSC would be looking for a promoter which has an international (or at least a national reputation).	The JFSC will want evidence that the promoters are persons/organisations held in high regard by the business community in which they operate. Such evidence can be in the form of newspaper articles, references. CVs will normally be required.
4.7   Financial resources of the promoting group
The promoter would be expected to be a member of a group which has significant substance in the form of shareholders' funds. It is considered important that the promoter is associated with an organisation that has the resources to safeguard its reputation if necessary.	The JFSC will wish to know what financial resources the promoter has.
4.8   The spread of ultimate ownership of the promoting group
Promoters in the ownership of or under the control of a single or a small number of persons are not likely to be acceptable as promoters of such funds	The JFSC is unlikely to look favourably upon a promoter that is in the sole ownership or control of one individual.

5 Notes

5.1   There is no particular significance in the sequence in which the above aspects are listed. The JFSC will take into account the appropriate balance of all aspects. If there is a deficiency against any one, it may be that this could be compensated for by strengths in relation to another. In general, it will be for the applicant to show why the promoter should be regarded as acceptable and to furnish documentary evidence in support. The JFSC may also seek such evidence independently.

5.2   With regard to paragraph 4 above (type of investor) some of the ways in which the type of investor may be identified include:-

5.2.1   the level of minimum investment required (although it is recognized that other factors, such as stock exchange listing requirements, may demand that this is kept lower than would otherwise be the case);

5.2.2   the ability of the promoter to provide the JFSC with a list of likely investors;

5.2.3   the manner of any restrictions as to qualifications for investors (e.g. US Accredited Investors);

5.2.4   a clear statement in the prospectus that the fund is only being offered to professional and institutional investors; and/or

5.2.5   investment being by placement only and suitably appropriate selection criteria being a contractual obligation on the agent.