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Guernsey is a premier jurisdiction for investment funds and private equity business. The island's reputation, location, tax neutral status and innovative approach continues to attract leading investment managers.
Guernsey's funds, investment managers, advisors and fund administrators are regulated by the Guernsey Financial Services Commission (GFSC) under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (the PoI Law).
Under the PoI law, managers, advisors and administrators (licensees) are required to be licensed to conduct certain investment business activities in or from within the Bailiwick of Guernsey (restricted activities) in relation to most collective investment schemes (ie funds) and other investments (controlled investments).
The attributes of a collective investment scheme subject to regulation under the PoI Law, in broad terms, are:
Where any one or more of these attributes are absent, the scheme itself will not be a controlled investment and so will not be subject to regulation under the PoI Law.
In order for a licensee to carry on any restricted activity in relation to category of open- or closed-ended collective investment scheme, the licensee must ensure that the fund is either authorised or registered by the GFSC under the rules applicable to an appropriate class of fund.
Authorised funds are authorised by the GFSC after a substantive review of the fund's terms, promoters and licensees and a determination of their suitability by the GFSC.
Registered funds are registered by the GFSC following the submission by a Guernsey licensed administrator of a representation that the fund is suitable for registration, having considered the fund terms, its promoter and licensee. In this case the administrator takes the role of the GFSC in monitoring the fund on an ongoing basis.
The current classes of fund (with the relevant scheme rules referred to in the footnotes below) are:
|Authorised||Closed Ended||Open Ended|
|Authorised Closed-Ended Fund||Class A Fund|
|Class B Fund|
|Class Q Fund|
|Registered||Closed and Open Ended Funds|
|Registered Collective Investment Scheme (RCIS) Fund|
|Private Investment Fund (PIF), Routes 1, 2 and 3|
|Manager Led Product (MLP)|
In addition, any authorised or registered fund can apply to be designated as a Guernsey Green Fund if it meets the relevant green investment criteria, comprising The Common Principles for Climate Mitigation Finance Tracking.
Each authorised or registered collective investment scheme will require a Guernsey licensed administrator (called a designated manager or designated administrator in the Rules) and all open-ended schemes, other than hedge funds, will require a Guernsey licensed custodian.
Hedge funds can apply for a derogation from the need for a Guernsey licensed custodian, provided they have a suitable non-Guernsey domiciled custodian.
In addition, each Route 1 PIF will require a Guernsey licensed PIF Manager and all PIFs are limited to a maximum of 50 investors at any one time but are not required to have a prospectus.
PIF and MLP: 1 day
RCIS Funds: 3 days
Class A Fund: 4-6 weeks
Class B, Q and closed-ended (non-QIF): 4-6 weeks
Class B, Q and closed-ended (QIF): 3 days
A table of application, annual and notification fees payable in respect of the fund's authorisation or registration are attached at annex 4. In addition to these there will be the statutory fees applicable for establishing and maintaining the vehicle, which will depend on the type of vehicle and service provider chosen, plus professional fees.
Our Investment Funds team have put together an FAQ as a useful guide to Guernsey hedge funds. Read the FAQ here.
Annex 1 - Restricted activities
Annex 2 - Controlled investments
Annex 3 - Guernsey Green Fund Criteria
 The Bailiwick of Guernsey includes the islands comprising Guernsey as well as the islands of Sark and Alderney
 Listed in Schedule 2 of the PoI Law – as reproduced in annex 1
 Listed in Schedule 1 of the PoI Law – as reproduced in annex 2
 The Authorised Closed-Ended Investment Scheme Rules and Guidance 2021
 The Authorised Collective Investment Schemes (Class A) Rules 2008
 The Authorised Collective Investment Schemes (Class B) Rules and Guidance 2021
 The Authorised Collective Investment Schemes (Qualifying Professional Investor Funds)(Class Q) Rules 1998
 The Registered Collective Investment Scheme Rules and Guidance 2021 and The Prospectus Rules and Guidance 2021
 The Private Investment Fund Rules and Guidance (2) 2021
 MLP Guidance Notes 2021
 See annex 3 for details of the criteria
 Qualifying Investor Fund – Guidance Note 2021 – Qualifying Investors are Professional Investors, Knowledgeable Employees and Experienced Investors
Michelle Watson Bunn
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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