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PRESS RELEASE 15 November 2006

Consultation Paper on proposed Listed Fund Guide

The Commission has today issued a consultation paper on a new Listed Fund Guide (the “Guide”).

The Commission intends to introduce a more streamlined process to authorise listed closed-ended funds under the Collective Investment Funds (Jersey) Law 1988, as amended. The key benefits of the proposal are the certainty given by a guide of this nature and the speed in which the applications can be processed.

A Listed Fund will have the following features:

  • Authorised within three working days – time to run from receipt of a duly completed application.
  • Closed-ended - meaning that the fund does not permit redemptions at the option of investors.
  • It must be a Jersey company - in time and depending upon demand, it may be possible to adapt the rules to suit other types of structure such as unit trusts and limited partnerships.
  • It must be listed - the Commission will publish a list of exchanges and markets that it recognises for the purposes of the Guide.
  • Annual audited accounts - the Commission to receive these within seven months of the year-end.
  • There must be a Jersey-based monitoring functionary – this functionary will conduct due diligence on the investment manager and monitor its actions on a continuing basis.
  • Requirements for the board of directors – the board of the fund company must have at least two Jersey resident directors and a majority of the board must be independent.
  • Risk disclosures – these must be made clear in the offering document.
  • Key records must be maintained in Jersey - this is the responsibility of the Jersey-based monitoring functionary. Other relevant records should be obtainable on demand.
  • The investment manager - has to be of good standing, established in an OECD member state or in a jurisdiction with which the Commission has a Memorandum of Understanding, and must be regulated in that state or jurisdiction. Special provision is made where the manager’s activity is not a regulated activity in its home jurisdiction.

For the purposes of the Guide, the Commission proposes recognising the stock exchanges of EU Countries and members of the European Free Trade Association who have ratified the European Economic Area Agreement (Iceland, Liechtenstein and Norway). It is also proposing to recognise stock exchanges recognised by the UK Financial Services Authority as Recognised Investment Exchanges, Recognised Overseas Investment Exchanges, or Designated Investment Exchanges (which includes the Channel Islands Stock Exchange).

The Commission may in the future recognise other stock exchanges or markets nominated by Jersey Finance Limited. It is envisaged, for example, that the London Alternative Investment Market (AIM) would fall into this latter category.

David Banks, Director - Securities, said, “The proposal introduces a lighter touch regulatory regime for a specific class of unclassified fund. However a key factor for the Commission is that this approach is complemented by the listing rules prescribed by those stock exchanges recognised by the Commission as providing the requisite levels of investor protection. The proposal is also in keeping with our commitment to adhere to internationally applied regulatory principles.

This is an exciting opportunity for the funds industry in the Island and is a further example of how responsive the Commission can be in new initiatives.”

The Consultation Paper can be viewed on the Commission’s website at and paper copies are available at the Commission’s reception area and the Jersey Library.

The Commission would welcome input from any interested parties. Responses should be submitted to the Commission by 15 December 2006.

- Ends -

For further information, please contact:

David Banks
Director, Securities
Jersey Financial Services Commission

Tel: + 44 (0) 1534 822048
Fax: + 44 (0) 1534 822002

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