Jersey is intending to introduce a streamlined authorisation procedure for closed ended investment funds already listed on other stock exchanges.
Its proposals for the new regime will be published in a Listed Funds Guide scheduled for release by the end of October which will outline the criteria funds need to meet in order to receive a quicker authorisation process.
The Jersey Financial Services Commission (JFSC) is proposing closed ended investment funds which are listed on European and other leading stock exchanges, including the Channel Islands Stock Exchange, should enjoy a streamlined 72-hour approval procedure.
And the JFSC says it intends to make the new regime available to private equity and property funds, as well as other alternative investments such as hedge funds and funds of hedge funds.
Details of the new regime were unveiled by David Carse, director general of the JFSC, at a seminar held yesterday by Jersey Finance and the Jersey Funds Association, and he suggested the Listed Funds Guide will operate in a similar way to the existing Expert Funds regime.
The Expert Funds regime has seen more than 250 expert funds established on Jersey since the regime was launched in 2004, but the JSFC says the biggest difference between the two regimes is there will be no selling restrictions attached to those investments meeting the Listed Funds criteria.
To take advantage of the quicker authorisation process, it is suggested funds will need to meet a number of criteria including:
- Having a listing on a recognised stock exchange or market
- Being formed as a Jersey close-ended company
- Having a majority of independent directors on the board
- Possessing an investment manager with appropriate experience and one which is regulated in its home jurisdiction or regulated by JSFC
- Satisfying the JFSC’s principles of corporate governance
The JFSC says it has decided to introduce the quicker process because it believes the regulatory environment for products listed on a recognised stock exchange already provides an “appropriate level of investor protection, and therefore a lighter level of regulation in relation to authorisation is considered appropriate”.
Although the proposals currently only relates to companies, the JSFC and the industry says it is undertaking a consulting process on whether the regime can be extended to include Jersey limited partnerships and unit trusts at a later date.
Gary Clark, chairman of the Jersey Funds Association, says while the Listed Funds Guide should be out later this month, the intention is to officially introduce the new regime before the end of the year.
He adds; “We have consistently indicated the while the Expert Fund regime has been a significant success for the funds industry in Jersey, the Island must continue to innovate and enhance its funds regime. The Listed Fund Guide is the latest initiative.”
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