reform initiatives could see managers self-certifying to speed up registration processes
The finance industry in Jersey is arguing over the details of a fund industry reform initiative designed to boost the island's small fund management presence.
The debate revolves around the definition of 'expert investor' in the new fund categorisation strategy set to be put into law at the start of next year.
When the new rules are finally put in place, managers will be able to self-certify expert investor funds, significantly speeding up the process of registration and giving Jersey a fund structure with the speed and flexibility to match the Isle of Man's Experienced Investor Fund, it is hoped.
Presently, the consultation paper outlines an expert investor must have a minimum investment of £250,000 and have a net worth of greater than £1m, not including primary residence.
Phil Austin, chief executive of Jersey Finance, said: 'At the moment some jurisdictions define and expert investor as someone who has $1m of assets including your home. However, the regulator would like it to be £1m worth of assets not including your home. The industry has looked at what other jurisdictions have defined it as and think Jersey should to keep competitive with other areas.'
According to Roger Bignell, director of authorisation at Jersey Financial Services Commission, while the industry is generally in favour of this self-certification process, there is still a disagreement about what the definition of an expert investor is.
Presently, the alternative investment industry is very small in Jersey and the only way to attract more expert funds is by changing the authorisation process.
Austin said: 'The consultation paper outlines four categories of funds. This will give people applying to establish funds a clear definition of what type of regulatory approval will be.
'Although the main focus of the proposals is to encourage more alternative investments to Jersey, there will still be a place for retail funds.'
The proposals establish a regime based on the regulation of the service provider rather than the fund itself.
The current policy statement divides promoters of expert funds into five categories. This includes the type of investor to whom the fund will be offered; the track record and relevant experience of the promoter; the financial resources of the promoter; reputation; and the spread of ownership.
The consultation paper gives a definition of what a promoter would have to do to be able for the administrator to approve self-certification of a fund. This includes address, track record and relevant experience; reputation of the promoter; financial resources of the promoter; and spread of ultimate ownership of the promoter.
Bignell said: 'By fund managers being able to self-certify the portfolio, it will speed up the process. It is hoped it will attract more alternative investment products to Jersey.
'There will be onsite visits to make sure that the companies adhere to the regulation for alternative investments. If they do not adhere it will go back to a case by case basis.'
The consultation paper asks the industry for feedback on the new regulations by the 31st August 2003.
Follows Asset Management Market Study
To open in second half of 2019
Regular reminders and updates
9 December 2019 deadline
Joe McDonnell joins as head of portfolio solutions (EMEA)