Guernsey revises its Private Investment Fund rules
11 December 2020 Guernsey
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Guernsey is set to revise the rules of its successful Private Investment Fund (PIF), expanding the fund regime with two supplemental models which remove the requirement for manager involvement.
The revisions are intended to create the most comprehensive and flexible suite of options of any private fund regime.
Guernsey says the PIF has been a popular addition to the Guernsey funds regime since it was introduced in November 2016.
PIF is used by new and existing fund promoters who have been able to quickly launch a simple and flexible product to private investors.
Following the feedback from a discussion paper during the summer, the Guernsey Financial Services Commission (GFSC) has now published a consultation paper inviting comments on three complementary approaches to PIF registration.
Alongside the current PIF model, two new routes are introduced removing the manager requirement including an alternative for qualifying investors only, with qualifying investors clearly defined.
The second route introduced is a “truly private structure” for family relationships only, reflecting Guernsey’s position as a jurisdiction of choice for family office structuring.
Rupert Pleasant, chief executive of Guernsey Finance, commented: “The PIF regime already provided a streamlined, rapid route to market for managers not looking to a large investor base.”
According to Pleasant, the GFSC proposed supplemental approaches to enhance Guernsey's offer and create a new benchmark for a private fund regime.
“These changes reflect the responsiveness of Guernsey’s regulator and its willingness to listen to the market. Its tailoring of product to the family office market – an area of growing significance for Guernsey – is commendable,” he said.
With a PIF, the fund manager makes declarations in respect of prospective investors’ ability to sustain losses, the maximum number of investors, and the completeness and accuracy of the application.
The GFSC has also this week opened consultation on proposed changes to its Non-Guernsey scheme regime, to move away from the requirements for firms to seek prior regulatory approval to administer non-Guernsey schemes, to a de facto notification regime which will require only reporting to be provided via licensees’ annual returns.
Both sets of proposals are open for consultation until the end of January 2021.
Guernsey also this year introduced regulations that allow the migration of limited partnerships into the alternative funds island jurisdiction.
The revisions are intended to create the most comprehensive and flexible suite of options of any private fund regime.
Guernsey says the PIF has been a popular addition to the Guernsey funds regime since it was introduced in November 2016.
PIF is used by new and existing fund promoters who have been able to quickly launch a simple and flexible product to private investors.
Following the feedback from a discussion paper during the summer, the Guernsey Financial Services Commission (GFSC) has now published a consultation paper inviting comments on three complementary approaches to PIF registration.
Alongside the current PIF model, two new routes are introduced removing the manager requirement including an alternative for qualifying investors only, with qualifying investors clearly defined.
The second route introduced is a “truly private structure” for family relationships only, reflecting Guernsey’s position as a jurisdiction of choice for family office structuring.
Rupert Pleasant, chief executive of Guernsey Finance, commented: “The PIF regime already provided a streamlined, rapid route to market for managers not looking to a large investor base.”
According to Pleasant, the GFSC proposed supplemental approaches to enhance Guernsey's offer and create a new benchmark for a private fund regime.
“These changes reflect the responsiveness of Guernsey’s regulator and its willingness to listen to the market. Its tailoring of product to the family office market – an area of growing significance for Guernsey – is commendable,” he said.
With a PIF, the fund manager makes declarations in respect of prospective investors’ ability to sustain losses, the maximum number of investors, and the completeness and accuracy of the application.
The GFSC has also this week opened consultation on proposed changes to its Non-Guernsey scheme regime, to move away from the requirements for firms to seek prior regulatory approval to administer non-Guernsey schemes, to a de facto notification regime which will require only reporting to be provided via licensees’ annual returns.
Both sets of proposals are open for consultation until the end of January 2021.
Guernsey also this year introduced regulations that allow the migration of limited partnerships into the alternative funds island jurisdiction.
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