New wave of regulatory innovations enhances Guernsey funds offering

The principal changes effectively reduce the administrative burden of regulation in certain areas and include: 

• amendments to the scope of application and the introduction of numerous new exemptions for the offer of general securities and derivatives, which include:  

  • the disapplication of the Prospectus Rules to the promotion of general securities (Category 2 Investments) to "Professional Investors" (a new category defined under the New Prospectus Rules) 

  • the raising of the threshold for promotions of Category 2 Investments to "non-Professional Investors" from 50 to 200 offers  

  • the disapplication of the Prospectus Rules to the offering of securities by way of distributions or incentive schemes in in connection with certain court approved schemes of arrangement and similar

• clarificatory amendments to the previous Prospectus Rules and Guidance, 2021 which apply to registered funds and in scope offers of Category 2 Investments

The New Prospectus Rules provide clarity while also ensuring Guernsey continues to apply international standards with respect to investor protection. It is anticipated that the GFSC's changes will result in the streamlining of existing processes for the preparation of offering documents and support a wider range of fundraising activity by Guernsey entities. 

To examine the changes and what they may mean for you, read our two-part briefing:

• part one covers the scope of application and new exemptions for offers of general securities

• part two discusses the changes to disclosure requirements

The GFSC has overhauled its Private Investment Funds (PIF) regime, replacing the Private Investment Fund Rules and Guidance (2), 2021 with the Private Investment Fund Rules and Guidance, 2025 (the New PIF Rules) with effect from 19 May 2025.

The New PIF Rules create a flexible and light-touch regulatory category suitable for a wide spectrum of private capital investment strategies, available for both open-ended and closed-ended funds.

The key features of the new Guernsey PIF regime include: 

• streamlining the regime to comprise two categories of PIF, being:

(i) Qualifying Private Investor Funds (QPIF)

(ii) Family Private Investment Funds (Family PIF) 

• expansion of the range of potential investors who are eligible to invest in a QPIF to include new categories of potential investors who are eligible to invest in a QPIF, including: "High Net Worth Investors", "UK Professional Investors", "EU Professional Investors" and "US Accredited Investors"

• no limit on the number of investors in a PIF

• no limit on the number of persons to whom PIFs may be offered 

• no requirement to prepare an offering document or prospectus

• no requirement for to appoint an auditor

• no requirement to appoint a Guernsey licensed manager

• regulatory approval in as little as 24 hours 

The statement indicates a more permissive approach to crypto currency funds and their suitability to institutional and retail investors (with appropriate protections). It also contains new guidance on the factors the GFSC will consider as part of the regulatory application process. 

The guidance aligns well with Guernsey's existing fund structuring options, particularly the New PIF Rules (new Private Investment Fund Rules and Guidance, 2025) mentioned above, which are well suited to both experienced institutional investors and family and friends structures seeking digital asset exposure. 

Read our article outlining the GFSC's guidelines: Guernsey opens the door to cryptocurrency funds.

The A&A Portal streamlines application and authorisation processes through a secure, online platform, making it significantly easier for people to start financial services businesses in Guernsey. 

Designed with industry input, the A&A Portal ensures quality and completeness of applications and supports online collaboration. It currently handles various investment, insurance and fiduciary applications, with more to be added in due course. The GFSC maintains its risk-based assessment approach and encourages early contact with applicants.  

For more information please refer to Online Applications and Authorisation Portal goes live with Beta launch.