Guernsey and Jersey fund regimes: authorised and certified funds

Open-ended means investors can have units redeemed or repurchased, or sell them on an investment exchange, at a price related to the underlying property's value. Closed-ended means they cannot (POI Law s.79). A licensee may not carry on restricted activities for a scheme outside those classes or another classification (s.7). Class Q units: fully paid units may pass to others on death, bankruptcy and similar events; partly paid units so acquired are redeemed.

Rules made under section 19 include the Class B, Class Q and authorised closed-ended scheme rules of 2021. The 2008 Class A Rules have effect as if made under section 19 (POI Law s.19). For an open-ended scheme, the designated administrator and the designated trustee or custodian must each be a company (Sch 3). An applicant tells the Commission of a change to its application as soon as practicable, and within 14 days or another period the Commission sets (s.8(7A)). Private investment funds have their own rules. Private investment funds are compared with Jersey Private Funds in the private fund domicile comparison.

A Class B scheme has a manager and a trustee that are different and act independently. Each is licensed and has a place of business in Guernsey (Class B r.4.1). It borrows only as its documents permit, as disclosed in its particulars and within the disclosed limits. The Class B trustee takes reasonable care over the manager's pricing methods. The Class B manager and trustee, and the Class Q manager and custodian or trustee, are separate, independent and licensed in Guernsey. A Class Q manager takes all reasonable steps to keep beneficial ownership with qualifying professional investors. Fully paid units may pass to others on death, bankruptcy and similar events; partly paid units so acquired are redeemed as soon as practicable (Class Q r.2.1).

Class Q investors are a government, local authority or public authority, in the Bailiwick or elsewhere, and a trustee of a trust with net assets over £2,000,000. Also a body corporate or limited partnership where it, a holding company or a subsidiary has net assets over £2,000,000. Also individuals with, with a spouse, net worth of £500,000, excluding home and household goods (Class Q r.11.1).

For a new Class B scheme, paragraph 2.7(5) is disapplied for one year from first invitation, or until it exceeds £5,000,000 if sooner. The manager and trustee must still take reasonable steps to invest with the aim of spreading risk (Class B r.2.7(7)). Material changes to investment, borrowing or hedging powers need prior written notice to the Commission (r.2.9). A suspension of dealings is notified immediately, with the reason (r.3.3; Class Q r.4.4).

The Class B (Amendment) Rules 2024 deleted the six-year unclaimed-distribution rule and the twelve-month unclaimed winding-up rule (Class B r.5.2(2); r.8.3(3)). They came into force on 20 December 2024, but do not apply to schemes authorised before then (Amendment Rules 2024, r.2 to r.4). A Class Q limit breach unresolved after three months is notified (Class Q r.3.3). A closed-ended scheme's particulars state the exit strategy and what happens if the initial raising fails (ACEIS Sch 1).

The designated administrator applies with the form, final principal documents, particulars, other material agreements, the fee and any other information required (RCIS r.6.1). The Commission may register the scheme if the documents comply with the Prospectus Rules, 2025. It may also do so where compliance with a part of those Rules is unnecessary in investors' interests (RCIS r.6.2, as amended 2025). Every scheme has a designated administrator and a qualified auditor. For an open-ended scheme, the administrator and the custodian or trustee are independent, incorporated, licensed and based in the Bailiwick (RCIS r.2.3 and r.2.4).

A registered closed-ended scheme may have a custodian or trustee outside the Bailiwick. The Commission considers this on full disclosure of adequate safeguarding (RCIS r.2.2, guidance). An open-ended scheme open for subscription reviews its particulars at least every twelve months (r.4.1(3)). From 1 July 2025, the RCIS (Amendment) Rules 2025 refer to the 2025 Prospectus Rules instead of the 2021 Rules (Amendment Rules 2025, r.2 and r.3, Annex A).

In full, a collective investment fund invests capital raised by an offer to the public, and does one of three things. It redeems units on the holder's request out of fund assets, or issues units, either continuously or in blocks at short intervals. Or it spreads risk. Article 3 is the core test; some long-term insurance is deemed a fund, and prescribed schemes may be excluded (CIF Law Art 3). An offer is not to the public where it goes directly to an identifiable category, who alone may accept. They have enough information to make a reasonable evaluation. At most 50 people, and no listing within a year (Art 3(3)). For a recognized fund, the Article 5 permit exceptions are a function wholly outside Jersey where Article 5(2) does not apply, or an exemption.

Article 8 covers three cases. One is a company issuing units that is incorporated in Jersey or has an established place of business there. Another is the trustee of a Jersey-law or Jersey-managed unit trust. The third is the general partner of a specified Jersey incorporated, limited or separate limited partnership managed from Jersey (CIF Law Art 8(1)). A limited liability partnership or LLC may not carry on the business of a collective investment fund. A breach is an offence punishable by up to seven years' imprisonment and a fine (Art 8(1A) to (2)). A certificate may carry conditions and specifies the fund's class, if any (Art 8B(2) and (3)). Article 5 also reaches some Jersey bodies acting as functionaries outside Jersey (Art 5(2)).

A Jersey fund company has at least two Jersey-resident directors, save for gaps of up to two months or longer if the JFSC agrees in writing (para 3.1). Expert Investors include those with individual net worth, or joint net worth with a spouse, over US$1,000,000 excluding their principal residence. Another is making a minimum initial investment or commitment of US$100,000 (Schedule 2, 1.2 and 1.5).

An OCIF is for the general public, including inexperienced investors. The JFSC relies on an Expert or Eligible Investor Fund's form stating compliance (Schedule 2, 4.3; Schedule 5, 4.3). An Expert Fund company has at least two Jersey-resident directors with suitable experience (Schedule 2, 2.3). To count as independent, a Listed Fund director should at least not be a current, or recent, employee of the manager, investment manager or their associates. Recent means within five years (Schedule 3, 1.5). A fund that is not an OCIF, Expert, Listed or Eligible Investor Fund makes no material change without the JFSC's prior written consent (Code 8.5). A Certificate Holder using the paragraph 9.2 route needs JFSC permission before the relevant UK or EU/EEA marketing (Code 9.2 and 9.3).

The roles include manager, administrator, registrar, investment manager or adviser, distributor, trustee, custodian or depositary (FS Law Art 2(10)). For a Jersey branch of a foreign bank, the JFSC accepts non-resident directors. It expects at least two senior managers in the day-to-day business to be Jersey-based (Fund Services Business Code note 4). A complaint is acknowledged in writing within five business days unless expressly agreed otherwise. The JFSC is told in writing as soon as a complaint is known to be unresolved after three months (para 3.6). The financial resources calculation runs at least every three months, except for managed entities of Qualifying Funds. It goes monthly, or as the JFSC sets, in two cases. One is Adjusted Net Liquid Assets below 130% of the Expenditure Requirement. The other is an event materially harming its financial resources (para 5.1.6).

The AIF Code 4.1 certificate is issued under the AIF Regulations. A legal person whose regular business is managing AIFs carries on AIF services business (FS Law Art 2(11)). Under the EU/EEA AIF Code, JFSC reporting is half-yearly for portfolios above EUR 100 million up to EUR 1 billion. The lower bound is EUR 500 million for unleveraged AIFs with no redemption for five years. It is quarterly above EUR 1 billion. Within the half-yearly band, a single AIF above EUR 500 million, counting assets bought with leverage, reports quarterly. Annual reporting applies to each unleveraged Directive AIF of one kind. Its core investment policy is to invest in non-listed companies and issuers to acquire control (AIF Code (EU/EEA), 2.1 and 18.3.3). Voting-rights stakes in non-listed companies are notified within 10 working days at 10%, 20%, 30%, 50% and 75%. SMEs and real-estate SPVs are excluded (paras 20.2, 21.1 and 21.5).

The UK-regime AIF Code applies to AIFMs managing EU or UK AIFs, or marketing Directive/UK AIFM Regulations AIFs in the UK or the Union. The EU/EEA Code applies to AIFMs managing EU AIFs, or marketing Directive AIFs in the Union (AIF Code (UK), 1.1; AIF Code (EU/EEA), 1.1). The EU/EEA Code's sub-threshold section is headed as relevant only from 16 April 2026 (2.1).

Notice periods vary by event. A Jersey proposed change of office or contact-person address is notified within five business days of the proposal being agreed (Code 6.7). Guernsey Class B and Class Q schemes publish annual reports within six months. Closed-ended and registered schemes send audited annual reports and accounts within six months (ACEIS r.5.2; RCIS r.5.3).

A pricing error over 0.5 per cent is notified as soon as the fund becomes aware (Code 6.7). For an open-ended scheme authorised or registered under the Law, a Guernsey licensee sends a contract note under the principal documents. It goes by the close of the seventh business day after the deal (Licensees (COB) r.10.3(1)). A Jersey fund services business gives at least ten business days' notice of a change of name or registered office (Fund Services Business Code 6.4). Article 12B(5) relieves only the holder's own one-month notice under paragraph (3), not the prior no-objection duty (CIF Law Art 12B(5)).