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Press Release - 11 June 2003

NEW CODES OF PRACTICE PROPOSED FOR COLLECTIVE INVESTMENT FUNDS

New proposals for Codes of Practice for permit holders of collective investment funds have been issued today by the Jersey Financial Services Commission.

They are part of a new streamlined authorisation process intended to make Jersey more attractive to sponsors of all funds, particularly "non-retail" funds. This new process has been under discussion for some months and agreement is expected soon.

The regulatory framework will be completed by the publication of Funds Classification guides, which together with the Codes of Practice will set out clearly the high standards expected of fund managers and administrators in Jersey. They will provide guidance as to the structure of all funds, including:

  • Definitions of four different types of fund (see notes).
  • Information that must be included in the constitutive documents of each type of fund.
  • The agreements entered into by service providers to the fund and investors.
  • The standards of conduct expected of businesses providing services to funds, including principles governing best practice in the area of corporate governance.

The new arrangements will enable a financial business subject to the Codes of Practice to certify that a fund complies with the terms of the Funds Classification - which will in turn speed up significantly the Commission's approval of that fund.

The Commission's aim is to move towards a system of regulating funds business that is similar to that for other financial business carried on in Jersey. For example, the format of the Codes of Practice is similar to existing codes already issued by the Commission for the trust investment business and insurance sectors.

In the short term the Codes will apply to all permit holders under the Collective Investment Funds (Jersey) Law 1988. Plans are in place for the longer term to transfer the Collective Investment Funds law into the Financial Services (Jersey) Law 1998.

Richard Pratt, Director General of the Jersey Financial Services Commission, said today: "We believe that the proposals will help Jersey's finance industry continue to grow by streamlining procedures, in particular for funds designed for the specialist and expert investor sectors. At the same time, we will be maintaining rigorous requirements for disclosure of all relevant details for funds aimed at broader groups.

"Our consultation paper raises a number of important questions on which we look forward to receiving a full range of responses from the finance industry - and indeed from financial institutions and investors themselves."

For further information please contact:

Roger Bignell,
Director of Authorisation
Jersey Financial Services Commission

Tel: 00 44 1534 822040
Fax: 00 44 1534 822047
E-mail: r.bignell@jerseyfsc.org

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