FUND LEGISLATION
Collective Investment Funds (Jersey) Law 1988 and Control of Borrowing (Jersey) Law 1947.
Financial Services (Jersey) Law 1998.
NUMBER OF FUNDS
| Overall | 1,370 |
| Collective Investment Funds | 1,139 |
| Expert Funds | 401 |
| Specialist funds | 957 |
| Private equity/venture capital | 273 |
| Property | 157 |
| Derivatives | 17 |
| Endowment policies | 28 |
| Hedge/alternative investment funds | 409 |
| Other | 73 |
| COBO (private) funds | 231 |
ADMINISTERED FUND ASSETS
| Overall | GBP 246.0bn |
| Collective Investment Funds | GBP 231.7bn |
| Expert Funds | GBP 14.4bn |
| Specialist funds | GBP 136.6bn |
| Private equity/venture capital | GBP 22.6bn |
| Property | GBP 31.3bn |
| Derivatives | GBP 173m |
| Endowment policies | GBP 1.4bn |
| Hedge/alternative investment funds | GBP 62.4bn |
| Other | GBP 18.8bn |
| COBO (private) funds | n/a |
(as of March 31, 2008, source: Jersey Financial Services Commission)
REGULATOR
Jersey Financial Services Commission (JFSC), PO Box 267, 14-18 Castle Street, St Helier, Jersey, JE4 8TP, Channel Islands. Tel: +44 (0)1534 822000.
SERVICE PROVIDERS
Lawyers
See www.jerseyfinance.je or www.jerseylaw.je
Fund administrators & custodians
Trust & company administrators/corporate service providers
Accountants
See www.jerseyfinance.je
Local stock exchange
Channel Island Stock Exchange: www.cisx.com
Local fund industry body
Jersey Funds Association: www.jerseyfunds.org
Promotion agency for funds/financial sector
Jersey Finance Limited: www.jerseyfinance.je
DOUBLE TAXATION TREATIES
Double taxation agreements exist with the UK and Guernsey, and a limited agreement with France exempting a resident of either country from tax in the other country on profits from shipping and air transport.
TAX INFORMATION EXCHANGE AGREEMENTS
Jersey, along with its fellow UK dependent territories Guernsey and the Isle of Man, is part of the EU’s information-sharing regime, whereby financial institutions are obliged to pass details of income on investments by nationals of EU member states to their home tax administrations.
Jersey has signed a memorandum of understanding with Bahrain (November, 2002), designed to facilitate co-operation on issues such as applications for licences from financial institutions and the investigation of irregularities, and is one of 24 signatories to a memorandum of understanding with IOSCO, the International Organisation of Securities Commissions (October 2003), to share information about the illegal use of securities and derivatives markets.
The JFSC has signed memoranda of understanding with the regulators in Dubai, Qatar, the Netherlands, the Cayman Islands (2006), Cyprus, Canada, Ireland and the British Virgin Islands (2007) formalising arrangements for co-operation, information-sharing and investigative assistance.
TYPES OF ALTERNATIVE FUND VEHICLE
Company (no minimum authorised or issued share capital, and no par value shares are available);
Limited Partnership (no maximum imposed on the number of limited partners);
Unit Trust.
AVAILABLE TYPES OF CORPORATE VEHICLE
Limited Liability Company (open-ended or closed-ended);
Incorporated Cell Company;
Protected Cell Company.
TYPES OF REGULATORY FUND CATEGORY
Recognised
The Recognised Fund legislation, modelled on the corresponding UK legislation, was introduced in order to demonstrate that the regulation of Recognised Funds in Jersey ensures investor protection at least equivalent to that afforded investors in the UK under the Financial Services and Markets Act 2000 (FSMA). The UK authorities have declared Jersey a designated territory and any fund granted a Recognised Fund certificate may seek authorisation under Section 270 of the FSMA to market directly to the general public in the UK. A Recognised Fund may only take the form of a unit trust or an open-ended investment company.
Unclassified Funds
An unclassified fund established in Jersey may be open-ended or closed-ended and may have a corporate structure or be a unit trust or a limited partnership. It is the JFSC’s policy that each unclassified fund is regulated to the extent and in a manner considered appropriate to the nature of the particular fund. The categories of Unclassified Fund are:
– Very Private/COBO-only Funds;
– Collective Investment Funds;
– Expert Funds (lighter regulation through self-certification);
– Listed Funds (listed on an approved exchange);
– Unregulated Funds (Exchange Traded or Eligible Investor).
AUDIT REQUIREMENTS
Depends on type of regulatory fund category:
Expert Funds and Listed Funds require an auditor to be appointed;
The JFSC will normally require a Collective Investment Fund to be audited;
Unregulated Funds do not need an auditor.
FINANCIAL STATEMENT REQUIREMENTS
Depends on type of regulatory fund category. Normally required for all fund types except for Unregulated Funds.
REGULATORY FEES
Collective Investment Funds (Jersey) Law, 1988:
Application Fees payable in respect of permits granted under Article 7 or certificates granted under Article 8B of the Collective Investment Funds (Jersey) Law, 1988, shall be:
£1,000 in respect of each Recognised Fund in relation to which the applicant is a functionary; and
£1,000 for each application for a certificate for a certified fund and an additional £1000 in respect of each fund service provider in relation to a certified fund; and
£500 for every additional pool of assets (as defined in the Collective Investment Funds Permit Fees Notice) added to an existing umbrella fund, which is a Recognised Fund or Certified Fund.
The minimum annual fee payable in respect of a collective investment fund is £2,000, although it is determined according to the total number of pools of assets in the fund at the time the fee is payable and therefore may be higher.
Financial Services (Jersey) Law 1998:
The application fee in respect of registrations to conduct fund services business granted under the Financial Services (Jersey) Law 1998 is £1,000. These applications are issued on a license basis and the fee is only payable once, for the function being undertaken (e.g. administrator license).
The annual fee payable in respect of a Jersey fund service business to which a license is granted under the Financial Services (Jersey) Law, 1998 is £2,000.
OVERALL COST OF FUND ESTABLISHMENT AND ADMINISTRATION
Fees payable for the establishment of a fund structure will vary greatly depending on the complexity of the structure, the knowledge and assistance provided by the promoter of the fund, and the fund category selected.
Based on a simple corporate fund structure, where the fund is an expert fund and has no unusual operational features, establishment costs are likely to be as follows:
– Legal fees £10,000 minimum
– Administrator fees£5,000 minimum
– Regulator fees £2,000
– Ongoing fees in relation to management and administration of the structure will be driven by the services required from the Jersey administrator, including the expected frequency of board meetings, fund size, investor reporting requirements and general investment activity. Such costs are likely to start at £20,000 for a small fund with few investors, low activity, quoted investments and standard reporting.
REGULATORY APPROVAL TIME
Unregulated fund – notify the JFSC with no regulatory involvement, therefore no extra regulatory approval time.
Expert Funds and Listed Funds – 3 working days.
All other Unclassified Funds – up to 20 working days.
OVERALL ESTABLISHMENT TIME
This will generally vary dependent on the status of the promoter, the complexity of the structure and type of regulatory fund category. Most funds can be established in four to six weeks from inception.
