Jersey today introduced two new classes of investment funds that do not require regulatory approval.
The new Unregulated Funds Regime was established in order to provide fund promoters with certainty, flexibility and speed, according to Jersey Finance, an island body that promotes and represents the finance industry. The new product adds to the range of existing regulated fund regimes already available from Jersey.
Jersey is now a much more attractive prospect for the typical hedge fund or private equity manager who invariably wants a fund set up and ready to trade in short timescales with no local minimum regulatory input, says Robert Kirkby, technical director of Jersey Finance, an island body that promotes and represents the finance industry. When combined with Jerseys convenient time zone and its existing reputation for funds business, we believe the new regime is a welcome addition to our capabilities as a funds jurisdiction and will be particularly attractive to European managers and promoters.
Within the new regime, there is no audit requirement, no limit on the number of investors, no investment or borrowing restrictions and no requirement for Jersey service providers. Promoters are offered a choice of fund vehicle including company, protected cell or incorporated cell company, unit trust or limited partnership.
The regime includes two categories of funds. The Unregulated Eligible Investor Funds may be open- or closed-ended and are restricted to sophisticated investors (including those who make a minimum initial investment or commitment of $1 million or equivalent). The Unregulated Exchange Traded Funds must be listed on one of 50 pre-approved stock exchanges including London, New York, the Channel Islands Stock Exchange, AIM, Nasdaq and Euronext.
Since Jersey announced its intention to launch the unregulated model alongside its existing fund categories, there has been considerable interest from the market and we anticipate it will be only a short time before the first funds in these classes are established, Kirkby adds. Jersey has been experiencing record growth in fund assets under administration and in particular has attracted considerable new business in the alternative fund sector, which now accounts for more than half the total value of the funds industry. The streamlined regulatory regime, which began with the introduction of the Expert Funds Guide in 2004, has been one of the driving forces behind this growth and the introduction of unregulated categories now completes the Islands regulatory offering for the funds industry.