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Press Release - 8 January 2003

SPLIT CAPITAL CLOSED ENDED FUNDS

The Jersey Financial Services Commission today announced the next steps in its review of split capital closed ended funds.

The Commission has now concluded that it is appropriate to appoint Accountants RSM Robson Rhodes together with a UK Queens' Counsel, to prepare a report which will cover, among other matters, the role and actions of the Directors of the Jersey based funds, particularly with respect to investment decisions. They will also look closely at the compliance of the managers with Jersey law and regulatory requirements as well as with the terms of the constitutive documents. The review will further cover the marketing of the funds.

Richard Pratt, Director General of the Financial Services Commission said:

"Many investors have seen reductions in the value of their investments and in some cases this has been very substantial. Investors are entitled to expect that funds meet the terms of their constitutive documents and treat investors fairly. They are also entitled to expect that their advisers provide advice that is consistent with their customers' needs and circumstances. The Commission has regulations in place to achieve this and has acted proactively to enforce them.

Up to this point the Commission has:

  • As part of its normal authorization process, reviewed the prospectuses and constitutive documents, and any notifiable changes to them;
  • Monitored the financial position of the funds in question on a regular basis;
  • Made enquiries into the corporate governance of the managers;
  • Kept in close contact with the Financial Services Authority in the UK who are examining the allegations of improper collusion between investment managers.

These actions will continue as the Commission monitors the progress of the above report."

For further information please contact:

Richard Pratt
Director General
Jersey Financial Services Commission

Telephone: +44(0) 1534 822011
Facsimile: +44(0) 1534 822001
Email: r.pratt@jerseyfsc.org

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