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Press Release - 3 February 2004

JERSEY LAUNCHES NEW FUNDS REGIME - Fast-track authorisation of expert funds and hedge funds introduced

New proposals to facilitate the establishment of 'Expert Funds' in Jersey are announced today by the Jersey Financial Services Commission. They will streamline the process for authorising and establishing new funds in the Island while laying down clear criteria about who can invest in them.

The Commission's Director General, David Carse, said: "Expert Funds are a significant new business opportunity for Jersey.
The proposals for a streamlined authorisation process - developed in consultation with the Jersey Funds Association and
Jersey Finance - will encourage this rapidly growing market sector without departing from sound regulatory principles.

"To protect less experienced investors, we have laid down strict criteria so that these funds will only be offered to investors with the expertise and resources to accept any extra degree of risk involved as a result of the nature of the investment."

Expert Funds are designed as flexible investment vehicles that can take any form recognised under the laws of Jersey. They may be open-ended or closed-ended, there will be no investment or gearing restrictions and for the majority of Expert Funds there will be flexible requirements in respect of custody or prime brokerage arrangements. They will be particularly suitable for establishing hedge funds and innovative products aimed at expert investors.

Expert funds will be obliged to set out clearly and fully all material information about the fund for potential investors in the offer documents. Investors in the funds will have to certify that they qualify as 'expert' - meeting strict criteria laid down by the Commission - and sign their agreement to an investment warning before investing.

It will be possible to establish Expert Funds in a matter of days. The Commission's proposals will enable "authorised functionaries" on the Island - for example, administrators, fund managers and trustees- to self-certify Expert Funds which meet criteria set down by the Commission in its Expert Fund Guide.

Every Expert Fund must appoint a functionary - who must be part of a Jersey regulated entity -whose duties include taking steps to satisfy themselves that the actions of the Expert Fund's investment manager are in accordance with the investment and borrowing restrictions set out in the prospectus. In addition, such functionaries will also be required to maintain adequate records in the Island should they be needed for regulatory purposes. Licensed functionaries will be subject to visits by the Compliance Division of the Financial Services Commission.

The Expert Fund Guide has been published on the Commission's website and the Authorisation Division of the Commission will accept applications to establish Expert Funds from tomorrow. Please Click Here to view this document (212k).

For further information please contact:

Roger Bignell
Director, Authorisation
Jersey Financial Services Commission

Tel: + 44 (0) 1534 822040
Fax: + 44 (0) 1534 822003
Email: r.bignell@jerseyfsc.org

 

Notes to Editors

1. Those qualifying to invest in Expert Funds include:

  • Professional and institutional investors
  • Investors with a net worth or joint net worth (with a spouse) above $1m (excluding the principal place of residence)
  • Investors making an investment of above $100,000.

2. In addition, the Commission will take a flexible approach to allow 'carried interest' investments to be made in an Expert Fund by, or on behalf of, those involved in establishing and providing services to the fund.

3. Appropriately qualified investment managers - who must have relevant experience, be solvent, without criminal or regulatory breaches and regulated in an OECD state - may establish Expert Funds using an expedited authorisation process. Other investment managers may approach the Commission on a case-by-case basis. The Commission will take a flexible approach, commensurate with offering sensible protection to the Island's reputation.

4. In order to establish an Expert Fund, an application form must be lodged with the Commission. Provided the form confirms that the proposed fund meets the published guidelines, all necessary consents and permits will be issued on an expedited basis.

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