Guernsey moves to further streamline fund creation

The jurisdiction has set out to expand its private investment fund regime with two new proposed routes for managers looking to establish vehicles there.

The Guernsey Financial Services Commission (GFSC) has published a consultation paper outlining two potential additions to its Private Investment Fund (PIF) regime that seek to make it easier for managers to establish funds there.

Under the jurisdiction’s PIF regime, a fund manager is required to make declarations with respect to prospective investors’ ability to sustain losses, the maximum number of investors and the accuracy and completeness of the application to establish a fund.

But GFSC is proposing two additional options that would eliminate those requirements. One route would be a regime for funds marketed to qualifying investors only, with qualifying investors clearly defined, while the other would be a “truly private structure” for family office investors.

“The PIF regime already provided a streamlined, rapid route to market for managers not looking to a large investor base,” said Rupert Pleasant, chief executive of Guernsey Finance. “The GFSC proposed supplemental approaches to enhance Guernsey’s offer and create a new benchmark for a private funds regime.”

GFSC has had a busy year on the private funds front. Besides the new initiative, it has also launched a fast-track manager regime, a regime to facilitate LP migrations to the jurisdiction and has proposed the introduction of an LLC regime.

The GFSC also proposed changes recently to its non-Guernsey scheme regime, updating requirements so that managers administering non-Guernsey schemes do not have to seek prior regulatory approval, instead moving to a de facto notification regime which only requires reporting to be provided via licensees’ annual returns.

Both proposals are open for consultation until the end of January 2021.