Guernsey plans ‘dual’ AIFM regime

Popular private equity domicile Guernsey will offer GPs both a regime compliant with the pending AIFM directive, and one with a relatively lighter regulatory touch.

Guernsey will offer private fund managers a regime fully compliant with the Alternative Investment Fund Managers Directive (AIFM). At the same time the offshore Channel Island will preserve its current regulatory framework for private equity funds outside of the directive’s reach, according to Guernsey Finance – the promotional agency for the island’s finance industry.

“It is our intention that Guernsey will operate a full AIFMD equivalent regime for those EU investors and managers who are obliged to take this route or any investors or managers who choose this as their preferred option,” said in a statement Fiona Le Poidevin, chief executive of Guernsey Finance.

For non-EU investors and managers there will be a parallel regime offering lighter regulations that Guernsey currently enforces on its private equity funds. This will also be available to EU investors who wish to use the national private placement regime or fall outside of the directive’s scope, according to the statement.

A source close to the Guernsey legislative process told PE Manager that details of the AIFM-compliant regime would not be available until the directive itself undergoes detailed “level II” rulemaking. Fine-tuned AIFM rules were originally due out earlier this year but have been delayed numerous times as the European Commission, European Parliament and the European Securities and Markets Authority continue to debate certain nuances of the directive. 

The level II provisions will provide guidance for governments and national regulators to transpose the framework regulation into national law. It also gives private equity firms the information they need to get their houses in order for the directive’s 22 July go-live date.

However some jurisdictions within the EU, such as Luxembourg and Germany, have already made significant headway presenting draft legislation to their governments. Likewise the Netherlands has already passed its AIFM bill into law.