On 15 March 2017, the Jersey Financial Services Commission ("JFSC") and Government announced the introduction of a single Jersey Private Fund ("JPF") regime for funds offered to up to 50 professional investors. This regime replaces the Very Private Fund ("VPF") and Private Placement Fund ("PPF") regimes for new funds, but with key features largely matching those of the lighter-touch VPF regime.
There are significant streamlining advantages to the JPF regime:
- Managers need no longer worry about transitioning from the VPF regime to the PPF regime when they decide to market to more than 15 investors
- 48-hour regulatory turnaround
- No PPM requirement (unless EU marketing requires it)
- Significant structural flexibility in terms of the legal form the fund may take and the location of its management entity and relevant board members
This lighter regulatory treatment is made possible through the reliance placed on the Jersey-regulated administrator appointed by the fund, which must carry out appropriate due diligence in relation to the fund.
Sitting alongside Jersey's successful Unregulated Fund regime (for non-EU investors), the hugely popular Expert Fund regime (where offers are made to more than 50 expert investors) and the forthcoming manager-led Jersey Registered Alternative Investment Fund ("JRAIF") regime, Jersey offers a uniquely compelling suite of fund regulatory products to suit varied manager and investor requirements.
The launch of Jersey’s new single private fund product will see the phasing out of all other Jersey private products although existing private funds will be able to continue to operate until the end of their natural life. Alternatively, existing private funds can apply to the JFSC to convert into another Jersey fund product, including the JPF.
Applications under the new JPF regime can now be made following its launch last week, on 18 April.
- Can be established as a Jersey company (including a protected cell company, an incorporated cell company or any cell thereof), limited partnership, limited liability partnership, separate limited partnership, incorporated limited partnership or unit trust
- Can also be established as virtually any non-Jersey structure so long as a Control of Borrowing (Jersey) Order ("COBO") consent is obtained
- Is suitable for structures with up to 50 professional investors
- Can be open-ended or closed-ended
- Is not required to appoint an auditor
- Must appoint a Jersey-regulated administrator (the "Designated Service Provider"), such as Moore Management, to ensure that the JPF criteria and applicable AML legislation are complied with and to carry out due diligence on the promoter
- Can only be marketed to specific categories of investors including those who a) subscribe for interests with a value of at least £250,000 and/or b) qualify as 'professional' (e.g. if their ordinary business or professional activity includes acquiring or managing investments or they have at least US$1m of investable assets)
- Must procure that investors receive and receipt a specified form of investment warning
- Cannot be listed (including a technical listing)
The Designated Service Provider shall be responsible for:
- Making reasonable enquiries to ensure that the JPF meets the eligibility criteria, including assessing the status of professional and eligible investors both on its establishment and on a continuing basis
- Ensuring that all necessary due diligence on the JPF and all related parties (including the promoter and service providers) is carried out
- Ensuring that the JPF is complying with all AML/CFT requirements
- Completing the application form
- Notifying the JFSC of any material changes to the information supplied as soon as reasonably practical (and within 28 days), and submitting an annual compliance return
Should you wish to discuss the new JPF regime in more depth, or find out how Moore Management can support your JPF requirements, please don’t hesitate to contact me.
T: +44 (0) 1534 822 510