Updated Prospectus Rules in Guernsey: new exemptions for offers of general securities

The Guernsey Financial Services Commission has published its updated Prospectus Rules and Guidance, 2025, which will come into effect on 1 July 2025 and replace the current Prospectus Rules and Guidance, 2021. 

In this first of two briefings examining the potential implications of these changes, we focus on changes to the scope of application and new exemptions for the offer of general securities and derivatives. In our next briefing, we will be summarising the updated disclosure requirements. 

Please note, while the current Prospectus Rules and Guidance, 2021 (2021 Rules) continue to apply to prospectuses currently in issue, the Prospectus Rules and Guidance, 2025 (2025 Rules) will apply to any new, updated or replaced prospectuses from 1 July 2025. 

Key changes include: 

• introduction of numerous technical exemptions to the requirements under the 2025 Rules 

• introduction of a new definition of "professional investor" as a further exemption to the 2025 Rules 

• increase of the maximum number of identifiable persons to whom category 2 controlled investments may be promoted, from 50 to 200 

Scope of application and existing exemptions

Like their predecessor, the 2025 Rules will continue to apply to:  

• registered investment schemes, whether open or closed-ended 

• an offer by a Bailiwick company, limited partnership and unit trust of any category 2 controlled investment under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (POI Law), that is general securities and derivatives not comprising fund interests 

• an offer to the public in the Bailiwick of any category 2 controlled investment, wherever the offeror is domiciled 

However, while there are only four instances in which compliance with the 2021 Rules is not required, the 2025 Rules carve out numerous specific exemptions from the scope of application. 

Those already excluded under the 2021 Rules will continue to remain out of the scope of the 2025 Rules, namely: 

• private investment funds (PIFs) 

• any offer of a category 2 controlled investment that is listed or traded on any stock exchange, in respect of a company, limited partnership or unit trust which is: 

  • registered or incorporated in a territory in which the local regulatory body is a member, associate or affiliate of the International Organization of Securities Commissions (IOSCO) or  

  • listed on an exchange that is supervised by a member of IOSCO

(In this regard, the 2025 Rules specify that any prospectus which is prepared as part of a listing application would also be exempt if the investment would, when listed, fall within either of the above categories)

• a “Red Herring” prospectus, which is to be circulated in advance of the final offer, which contains appropriate disclaimers 

The 2025 Rules work well with the new Private Investment Funds Rules and Guidance, 2025 to create a flexible and light touch regulation for PIFs, allowing for: 

• an unlimited number of offers to be issued 

• new and broader categories of investors eligible to invest in a PIF 

• no requirement to appoint an auditor 

• no requirement to issue a prospectus 

Promotion to specific categories of persons

Promotion of any type of controlled investment directly communicated to an identifiable category of persons falls outside the scope of the 2021 Rules when those persons are: 

• no more than 50 and 

• in possession of sufficient information as to be able to make a reasonable evaluation of any offer included in the promotion and are the only persons who may accept such an offer 

Under the 2025 Rules, this exemption is both amplified and particularised with respect to the type of investment being promoted: 

• on the one hand, the offer may be made to up to 200 persons, where professional investors (which we explain below) are not counted towards this limit 

• on the other hand, the promotion must relate to a category 2 controlled investment, meaning that any promotion of fund interests, that are category 1 controlled investments, will be subject to the 2025 Rules 

Professional investors

The 2025 Rules introduce a new exemption regarding the promotion of a category 2 controlled investment to professional investors. 

For these purposes, a professional investor is an investor who is able to evaluate the risks and strategy of investing in the offer and bear the consequences of investment, including the possibility of any loss arising from the investment, and may be either: 

• a government, local, public or supra-national authority, whether in the Bailiwick of Guernsey or elsewhere 

• a person or incorporated or unincorporated entity whether incorporated, listed or regulated in an OECD country or otherwise, whose ordinary business or professional activity includes acquiring, underwriting, managing, holding, or disposing of investments whether as principal or agent, or the giving of advice on investments 

• an individual investor who makes an initial investment of not less than US$100,000 or equivalent, where the amount invested represents no more than 25% of the individual’s investable assets 

It is worth noting that according to the guidance, the exemptions can be used cumulatively. Therefore, an offer can be made to an unlimited number of professional investors and up to 200 non-professional investors without being required to comply with the 2025 Rules. 

Additional category 2 exemptions

In addition, a category 2 controlled investment falls outside the new 2025 Rules when: 

• the offer sets the minimum consideration for the investment to at least £100,000 (or equivalent in another currency) 

• the promotion is directly communicated to qualified investors within the meaning of Regulation (EU) 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market 

• made in connection with a transaction which is: 

  • subject to, and is undertaken in accordance with, the Takeover Code 

  • the subject of a court sanctioned scheme, process or order by a court in:  

    • the Bailiwick of Guernsey 

    • Jersey 

    • the United Kingdom 

    • any other jurisdiction which the GFSC may approve upon application 

Distributions and incentive schemes

Any securities (regardless of whether they constitute category 2 controlled investments) are not subject to the 2025 Rules where they are offered or allotted to: 

• members of a company in full or partial satisfaction of a distribution made by that company, such as scrip dividends and rights issues, or 

• existing or former directors or employees by their employer provided that a document is made available containing information on the number and nature of the securities and the reasons for and details of the offer or allotment 

Other recent updates to the Guernsey funds regime

This latest announcement from the GFSC follows a wave of recent changes in the Guernsey funds space, including: 

• the GFSC's position regarding crypto currency funds and guidance on related applications 

• the new Private Investment Fund Rules and Guidance, 2025  

• the new guidance note on Unclaimed Investor Money under the POI Law 

For more information on what the recent changes mean for you, contact our Investment Funds team.