On 15th December 2008, changes were made to the regulation of investment funds in Guernsey. Those changes created two regulatory regimes for collective investment schemes in Guernsey:
- registered investment schemes; and
- authorised investment schemes.
Further changes to the registered investment scheme regime were made with effect from 1 April 2015. This briefing note analyses the differences between the two regimes.
Repeal of COBO
- the Registered Collective Investment Scheme Rules 2015 (RCIS Rules), applicable to open and closed-ended registered funds;
- the Prospectus Rules 2008 applicable to open and closed-ended registered funds; and
- the Authorised Closed-ended Investment Schemes Rules (ACIS Rules) 2008 applicable to authorised closed-ended funds.
Authorised funds which meet the QIF criteria can access the same fast-track (three-day) approval process as registered funds. Therefore, for funds which meet the QIF criteria, timing considerations alone will not dictate which regime is the more suitable. To assist promoters and their advisers in choosing between the two regimes, we set out below a comparison of the registered and authorised regimes.
Closed-ended funds (authorised or registered) are not required to appoint a custodian and may appoint a custodian or trustee that is domiciled outside Guernsey.
The GFSC adopts the same (existing) policy of selectivity in respect of both regimes.
The designated manager/administrator of an authorised or registered fund must submit to the GFSC within six months of the end of each financial year the audited annual report and accounts together with any principal documents or other agreements which have been amended (or, in the case of authorised schemes, materially amended). The requirement to file quarterly statistical information is identical under both regimes.
The first such notification has to be submitted to the GFSC within 12 months of the date on which a declaration of authorisation or registration was issued and thereafter at intervals of not more than 12 months. Nil returns are required.
The designated manager of an authorised fund must give written notice forthwith to the GFSC of:
- a proposed material change in the constitutive documents or the information particulars of the fund;
- a proposed change of the (i) manager or general partner, (ii) designated manager/administrator, (iii) secretary, (iv) registrar, (v) custodian or trustee, (vi) investment adviser or investment manager, (vii) directors, or (viii) qualified auditor;
- a proposed material delegation of the duties of any of the parties listed in (2)(i) to (vi) above;
- any change in the name or of the ultimate or intermediate beneficial ownership of any of the parties listed in 2(i) to (vi) above;
- any proposed material alteration to any agreement under which a licensed entity provides management, administration or custody services to the fund;
- any proposed material alteration to the fund itself including its name and its investment, borrowing and hedging powers;
- any proposal to reconstruct, amalgamate, terminate prematurely or extend the life of the fund;
- any proposal to list or de-list the fund on any stock exchange; and
- the bringing of or the intention to bring any proceedings against or by the fund.
Notably, both the RCIS and ACIS Rules only require notification of these matters to the GFSC. They do not explicitly require GFSC consent to the proposed changes.
However, any proposed change to the designated manager/administrator or custodian (where relevant) requires GFSC consent under both the RCIS and ACIS Rules.
- A registered fund constituted as a limited partnership must disclose details of significant beneficial ownership of its general partner. There is no equivalent disclosure for authorised funds under the ACIS Rules;
- The information particulars of a registered fund must contain a responsibility statement stating that the directors, general partner, manager or trustee (as appropriate) have taken all reasonable care to ensure the accuracy of the information particulars. Although the ACIS Rules ascribe responsibility for the accuracy of the information particulars to the directors, general partner, manager or trustee (as relevant) of the fund, the ACIS Rules do not require an explicit statement to that effect to be included in the information particulars.
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.