Channel Islands (Jersey and Guernsey)

1. EEA AIFMs

Jersey

Jersey is not within the EEA and is known as a ‘third country’ for the purposes of AIFMD.

As the first ‘third country’ to announce a strategy of implementing an AIFMD ‘opt-in’ regime, Jersey now has the regulatory framework to offer a fully AIFMD compliant solution for fund managers. Furthermore, Jersey is expected to be in the first wave of appointed Non-EEA countries to benefit from the passporting regime. Once that regime has been implemented, Jersey will be in a position to provide full optionality for fund managers to elect to use EU / EEA member states’ private placement regimes or EU / EEA passporting according to the needs and strategies of the funds for which they act.

Guernsey

Guernsey is not within the EEA and is known as a ‘third country’ for the purposes of AIFMD.

In response to AIFMD and to cater for its global client base, Guernsey has adopted a dual regime where there are two parallel regulatory regimes for investment funds: the existing regime remains in place for managers and investors not requiring an AIFMD fund, including those using EU national private placement regimes and those marketing to Non-EU investors; and an opt-in regime which is fully compliant with AIFMD. With regard to marketing in countries of the EU and wider EEA, Guernsey will transition to full passporting as and when that regime is implemented at a European level for third countries.

2. Marketing into Jersey and Guernsey as a non-EEA jurisdiction

Jersey

Please refer to the ‘CMS Guide to Private Placement of Funds’ for detail on the Jersey legal and regulatory considerations regarding the selling of securities into Jersey. In brief, a consent will need to be obtained under the Control of Borrowing (Jersey) Order 1958 (“COBO”) unless an exemption to COBO is available (for example, there is an exemption for limited companies and unit trusts (i) which do not have a “relevant connection” with Jersey and (ii) where the offer to invest is not an offer to the public or the offer is valid in the United Kingdom or Guernsey). Additionally, any person conducting marketing or promotional activities in Jersey will need to hold a licence as a fund distributor under the Financial Services (Jersey) Law 1998 or benefit from an exemption to that law (such as the ‘overseas persons’ exemption where the fund falls into certain regulatory classifications).

Guernsey

As Guernsey does not form part of the EEA, AIFMD does not apply to the selling of securities in funds, wherever based, into Guernsey.

Please refer to the ‘CMS Guide to Private Placement of Funds’ for detail on the Guernsey legal and regulatory considerations regarding the selling of securities into Guernsey. In brief, under Guernsey law the “promotion” of fund interests is a restricted activity which requires a licence from the Guernsey Financial Services Commission (“GFSC”), pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987 (as amended) (“POI Law”). However, there are certain exemptions, including: (i) if the promotion is being aimed at those holding a licence under Guernsey’s regulatory laws (including the POI Law), (ii) certain exempt non Guernsey schemes can be freely promoted and (iii) the “passive” rather than “active” promotion by an “Overseas Person” of fund interests in or from within the Bailiwick of Guernsey.

3. Fees

Jersey and Guernsey

The statutory fees will depend upon the individual circumstances involved, including the regime selected.


Carey Olsen (Guernsey) LLP key contacts: 

  • David Crosland
  • Colin Calvert

Carey Olsen Jersey LLP key contacts:

  • James Mulholland
  • Sophie Hancock