Jersey: Jersey Expert Funds

Last Updated: 19 January 2005
Article by Edward Quinn and Eve Kosofsky


As a politically stable and tax neutral jurisdiction with over 40 years accumulated experience as an international finance centre, Jersey has gained a strong reputation as a prime location in which to establish collective investment funds.

Initially, Jersey made its reputation in this area in the context of retail funds. However, the funds industry is always evolving, and today Jersey is increasingly attractive to non-retail schemes, whether joint ventures, hedge funds, private equity vehicles or other schemes aimed at "expert investors".

The Jersey Financial Services Commission (the "Commission") recently issued its Expert Funds Guide (the "Guide") to ensure that funds aimed at such investors may be established quickly and cost-effectively in Jersey, and to provide certainty and guidance to those wishing to establish such funds.

The Guide follows detailed consultation with industry in Jersey and the United Kingdom and the results of a benchmarking exercise against other relevant jurisdictions.

The impetus behind the consultation exercise is to position Jersey as the jurisdiction of choice for offshore funds, particularly expert funds and private equity structures.

Expert Funds

Approval Process

The Guide represents a radical change in the manner in which Jersey funds are regulated. Funds qualifying as Expert Funds will be established on certification by licensed Jersey service providers – typically, the fund administrator – that the fund complies with the Expert Fund criteria set out in the Guide. The Commission will issue the relevant permits on receipt of the certification.

As a result, an Expert Fund is capable of being established in Jersey within a matter of days. The Commission does not need to review the fund structure, documentation or the promoter.

What Is An Expert Fund?

An Expert Fund is a fund meeting the following criteria:-

  1. Clearly, the definition of an "expert investor" is crucial. An investor must be one of the following: in the business of buying or selling investments; a person with a net worth of more than US$1m, excluding principal place of residence; an entity with at least US$1m available for distribution; connected with the fund or a functionary of the fund (there is a flexible approach to carried-interest arrangements); an investor making a minimum investment of US$100,000.
  2. All investors must sign a prescribed form of investment warning before being registered as subscribers in an expert fund.
  3. The investment manager must either have been previously approved by the Commission or else be without convictions or disciplinary sanctions; solvent; regulated in an OECD member or associate member state; experienced in using similar investment strategies to those adopted by the Expert Fund; able to demonstrate an adequate span of control over the business.
  4. If an investment manager does not meet these requirements, it may approach the Commission on a case by case basis. Of course, if permission is granted then, absent any material change, the investment manager will not need specific approval to establish further Expert Funds.

  5. Jersey-based functionaries will need to comply with Codes of Practice. These will shortly be published by the Commission and they will set out the conduct of business requirements for functionaries holding permits issued by the Commission.
  6. A small number of key structural requirements are imposed on such funds:
  • The offer document must set out all material information in respect of the fund;
  • A licensed Jersey administrator or manager must be appointed and must satisfy itself that the investment manager is acting in accordance with its mandate (save in the case of a closed ended unit trust where a trustee is the only local functionary required);
  • A Jersey custodian or (in the case of hedge funds) an international prime broker must be appointed for open-ended funds;
  • Two Jersey resident directors with appropriate experience must be appointed to the board of the fund company/general partner/trustee.


There are no investment or borrowing restrictions imposed on the fund, which may be structured as a corporate entity, a limited partnership or a unit trust. Nor is there any limitation on the number of investors such a fund may have.


The Guide aims to provide a "safe harbour" available to the majority of non-retail funds. However, in addition, as well as bringing certainty to the process of establishing funds that fall within this safe harbour, the new policy will free up Commission time so that derogations from the Guide may also be considered on an expedited case by case basis.

It is important to note that a fund which fails to satisfy any of the Guide’s criteria will only need to satisfy the Commission on the points it fails to meet and will not be required to submit a full application for review. For example, if the fund is not regulated in an OECD member state but fulfils the other criteria, the Commission’s approval of investment experience will be required but a full application will not be required.

Other Schemes – In Brief

Private schemes (50 or fewer offerees) may be regulated as Expert Funds. If, however, a client wants a regime that does not attract statutory fees, a private scheme can be regulated under the existing Control of Borrowing legislation whereby the Commission’s approval of the status of the functionaries, fund structure and the Offering Memorandum will be required. A retail fund will continue to be regulated under the existing regime on a case by case basis.

Future Plans

The Commission also intends to introduce a regime where there are no regulatory restrictions on funds with less than 15 investors.

The Guide is the first major overhaul of funds legislation in Jersey since the enactment of the Collective Investment Funds (Jersey) Law 1988. It is an important modernisation of the legal framework further enhancing Jersey’s reputation as a place in which to conduct business.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions