17 December 2021

Guernsey Registered Funds

Registered funds are one of the two types of Guernsey funds[1].

The Protection of Investors (Bailiwick of Guernsey) Law, 2020 (the “POI Law”) grants the Guernsey Financial Services Commission (the “GFSC”) the ability to develop different t classes of registered funds and determine the rules applicable to such classes.

Classes of registered funds

There are currently two classes of registered fund:

  • funds registered under The Registered Collective Investment Schemes Rules 2021 (an “RCIS Fund”; the “RCIS Rules”);
  • funds registered under The Private Investment Fund Rules (2) 2021 (a “PIF”; the “PIF Rules”).

 

Each of the three classes of registered funds can be open- ended or closed-ended.

The registration process

Registered funds are registered with the GFSC. They receive their registration following a representation of suitability from the administrator (a Guernsey body holding a POI Law licence, who scrutinises the fund and its promoter in lieu of the GFSC and takes on the ongoing responsibility for monitoring the fund).

The registered fund regime therefore shifts responsibility for compliance with the applicable legislation on to the POI Law licensee.

The POI Law licensee (the administrator) warrants to the GFSC in the relevant registration document that the promoter of the fund is suitable and (where applicable) that the fund documentation is appropriate and satisfies regulatory requirements. The GFSC will issue the registration in reliance upon those warranties.

Although it does not scrutinise the fund, the GFSC will scrutinise the entity giving the warranties to ensure that they are correctly made (i.e. backed up by appropriate documentation). The GFSC attaches great importance to this. It expects there to be documentary evidence to support the warranties being made and for the person making those warranties to be able to produce such evidence immediately at the request of the GFSC. Applicants who cannot substantiate their applications will be excluded from participation in the registered funds self-certification programme.

RCIS funds

Under the RCIS Rules, the administrator applies for a fund to be registered with the GFSC by completing a Form REG.

The Form REG contains warranties that the administrator has performed sufficient due diligence to be satisfied that the promoter and associated parties are fit and proper, and confirmation that the administrator is content that the disclosures in the fund’s prospectus and offering document meet the requirements set out in the Prospectus Rules 2021 and include the GFSC’s standard legends.

The administrator is encouraged to liaise with the GFSC in advance if it has any concerns about the promoter or the fund to avoid any potential delays in the three working day consent.

Upon receipt of the signed Form REG, together with copies of the constitutive documentation, material agreements and the registration fee, the GFSC will register the fund within three working days.

PIFs

The GFSC introduced a new class of registered fund – the Private Investment Fund – in 2016. The GFSC can turnaround a PIF application within one business day and there is no requirement for a private placement memorandum.

The PIF regime was further expanded in 2021 with two new “Rules”. Please see here for further information on PIFs.

[1] The other being authorised funds. 

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