Jersey Financial Services Commission has issued a consultation paper on proposals to streamline the authorisation process of close-ended funds.
Under the proposed ‘Listed Fund Guide’, a listed fund will have to be close-ended and could be authorised within three working days, providing it is a Jersey based company and has an investment manager which is regulated in a recognised state or jurisdiction.
In addition the 43-page consultation paper, which close on 15 December, will mean the Commission will recognise the stock exchanges of EU countries, along with members of the European Free Trade Association who have ratified the European Economic Area Agreement, such as Iceland, Liechtenstein and Norway.
Under the proposals, the new 'light touch' regime will work on the basis if the fund is already listed on an existing recognised stock exchange, enough consumer protection should be in place for the JSFC to be able to streamline the proicess and speed up authorisation.
The JSFC also plans to recognise stock exchanges which are recognised by the UK Financial Services Authority (FSA) as a recognised investment exchange, a recognised overseas investment exchange, or a designated investment exchange such as the Channel Islands Stock Exchange.
There is also the possibility the JSFC may in future also recognise funds listed on exchanges nominated by Jersey Finance, such as the Alternative Investment Market (AIM), to be able to apply the streamlined authorisation process.
David Banks, director of securities at JSFC, says the proposals introduce a lighter touch regulatory regime for a specific class of unclassified fund, although he points out the approach is “complemented” by the listing rules providing the “requisite levels” of investor protection, set out by the stock exchanges which are recognised by the JSFC.
He adds: “This is an exciting opportunity for the funds industry in the Island and is a further example of how responsive the Commission can be in new initiatives.”
In addition the JSFC has issued a revised version of its ‘Expert Fund Guide’ following a period of consultation which resulted in a number of minor changes to the initial regime.
The expert fund regime was introduced three years ago, but a lack of clarity over certain issues has led the Commission to revise six main areas of the regime, including the requirements which need to be met for stock exchange listings; clarification over the minimum and initial amount of investment , and the responsibilities of the Jersey functionary.
John Harris, director general of JSFC, says the regime has proved highly popular with investors, the funds industry and their advisors since its introduction, but the industry has requested these changes to the 24-page guide in order to clarify the Commission’s position on a number of issues.
He adds: “I am confident these changes will not only assist in further promoting Jersey Expert Funds outside the Island but will also serve to enhance the efficiency by which such funds are processed by the Commission."
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