The Authorised Collective Investment Schemes (Class B) Rules 2021
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The Class B Rules govern open-ended funds that the GFSC authorises under its own class rulebook. Every Class B scheme needs a designated administrator and a separate designated trustee or custodian, each licensed in Guernsey and independent of the other (Rule 4.1(1)). The Rules set no investor eligibility test and no fixed investment limits. They hold the fund to the limits in its own documents. Holders must get notice in time to redeem before those limits change (Rule 2.7(9)).
Scope and the core mechanism
Class B funds are open-ended. The particulars must say so (Schedule 1, item 1). A unit trust needs a written trust instrument, and a limited partnership a written agreement (Rule 2.1). The GFSC may exclude or modify any rule by written notice (Rule 1.1(2)). An umbrella fund qualifies only if each part would qualify on its own (Rule 1.1(6)).
The application carries a statement signed by the manager or a law firm (Rule 2.3(1)). The statement either confirms full compliance or lists the rules not met, with reasons. It names the proposed designated administrator and trustee or custodian. The GFSC may declare the scheme authorised if the documents comply, or if meeting a content rule is not needed in investors' interests (Rule 2.4). For an umbrella fund, a part or class not activated within one year of its declaration is revoked (Rule 2.4(3)).
In these Rules, "manager" means the designated administrator, or both it and any principal manager (interpretation rule). Guidance in the introduction splits the roles (introduction guidance). A principal manager, where there is one, takes responsibility for the scheme's decisions. The designated administrator monitors adherence to the investment restrictions. Ultimate responsibility rests with the board, the general partner or, in a unit trust with no principal manager, the trustee. A company incorporated under Part 1 of the Companies (Guernsey) Law, 2008 must also comply with that Law, which takes precedence over these Rules.
Key provisions
| Provision | What it says | The practical point |
|---|---|---|
| Manager and trustee (Rule 4.1) | The manager and trustee must be different persons acting independently. Each must be licensed under the Law and incorporated or a branch in Guernsey, with a place of business there (Rule 4.1(1)). | Neither may be the other's subsidiary or share executive directors or officers. The trustee of a money market fund must be a bank registered under the Banking Supervision Law 2020 (Rule 4.1(9)). |
| Investment powers (Rule 2.7) | The fund must spread risk and stay within the limits in its documents. On becoming aware of a breach, the manager acts at once to rectify it and tells the trustee (Rule 2.7(6)). | The GFSC gets written notice if the breach is not rectified within one month of the manager becoming aware. A breach beyond the manager's control must be rectified as soon as reasonably practicable, and within six months of awareness (Rule 2.7(7)(b)). |
| Start-up period (Rule 2.7(7)(a)) | Rule 2.7(5) is disapplied for one year from the first invitation to investors. It ends earlier once scheme property first exceeds £5,000,000 (Rule 2.7(7)(a)). | During that period the manager and trustee must still spread risk and invest consistently with the portfolio required at its end. |
| Borrowing and hedging (Rule 2.8) | Borrowing and hedging need a disclosed power in the documents. They must stay within its limits (Rule 2.8(1) and (2)). | A breach needs prompt corrective steps and notice to the trustee. The GFSC is told in writing if it is not rectified within six months of awareness (Rule 2.8(6)). |
| Prior notice to the GFSC (Rule 2.9) | The manager gives prior written notice of a proposed material alteration to investment, borrowing or hedging powers (Rule 2.9(1)). | Where documents change, a certificate from the manager or a law firm confirms continued compliance or sets out the exceptions (Rule 2.9(2)). |
| Replacement parties (Rules 4.6 and 4.7) | A replacement trustee or custodian takes office only once the GFSC confirms the designation (Rule 4.6(2)). | The same applies to a replacement designated administrator (Rule 4.7(2)). |
| Scheme particulars (Part 2) | Particulars must meet Schedule 1. They are reviewed at least every twelve months and amended at once for material changes (preparation and contents rules). | A purchaser who suffers loss from an untrue or misleading statement, or a required omission, can claim compensation (compensation rule). The principal manager answers, or else the directors, the trustee or the general partner. |
| Custody (Rule 4.5) | The trustee is responsible for safe custody of all scheme property. It is liable for loss caused by its unjustifiable failure to perform (Rule 4.5(2)). | The trustee may place title documents with a sub-custodian, but never with the manager. It must also check that the manager's pricing methods follow the fund documents (Rule 4.5(6)). |
| Conflicts (Rule 4.8) | Deposits and loans with an affected person need an eligible institution or approved bank, on arm's length terms (Rule 4.8(1)). | Asset dealings need best execution on exchange or an independent valuation, with the trustee judging holders unlikely to be prejudiced (Rule 4.8(3) to (5)). Other reliable evidence is a fallback only where neither route is available (Rule 4.8(6)). |
| Reports (Part 6) | The annual report is published within six months of the period end (Rule 6.2(1)). A copy goes to the GFSC, in English, within the same six months (Rule 6.2(4)). | The report includes a portfolio statement and the trustee's report on whether the manager kept to the documents and Rules (Rule 6.1(1)(g) and (j)). |
| Suspension (Rule 8.1) | In exceptional circumstances, the manager must suspend dealing at the trustee's request. It may also suspend with the trustee's prior agreement, or as the documents require or permit (Rule 8.1(1)). | At the time of suspension, the manager, or the trustee that required it, confirms it in writing with reasons. Holders, the GFSC and any authority where the fund is sold publicly receive it. Dealing resumes as soon as practicable once suspension is no longer thought necessary (Rule 8.1(2) and (4)). |
Amendment history
| Date | Instrument | What changed |
|---|---|---|
| 2013 | Authorised Collective Investment Schemes (Class B) Rules 2013 (G.S.I. No. 49 of 2013) | The predecessor under the 1987 Law. Its authorisations stay valid, and its exclusions continue where the 2021 Rules allow (Savings rule). |
| 1 Nov 2021 | Class B Rules 2021 (G.S.I. No. 128 of 2021) | Came into force on 1 November 2021 and revoked the 2013 Rules. Designated managers were re-designated as designated administrators. |
| 20 Dec 2024 | Class B (Amendment) Rules, 2024 | Made on 13 December 2024. Retitled Rule 5.2 "Joint holder distributions". Deleted Rule 5.2(2), under which unclaimed distributions became scheme property after six years where the documents were silent. Also deleted Rule 8.3(3), under which the trustee distributed unclaimed winding-up proceeds under applicable law after twelve months. Rule 3 disapplies the amendment for schemes authorised before 20 December 2024. For those schemes, Rules 5.2(2) and 8.3(3) still apply as made in 2021. |
What it works with
The Rules sit under the Protection of Investors Law 2020 (summary: POI Law page). The other authorised classes are the Class Q Rules 2021 for qualifying professional investor funds and the Authorised Closed-ended Investment Schemes Rules 2021. Registered funds use the RCIS Rules 2021 and the Prospectus Rules 2025. A registered scheme may elect into the PIF Rules 2025 (Rule 1.1(4); summary: PIF page).
Contract notes follow Part 10 of the Licensees (Conduct of Business) Rules, 2021 (pricing rule). Pricing controls point to the GFSC's pricing controls guidance, compared across domiciles in the NAV error correction matrix. Filing dates sit in the fund annual return deadlines table. Fees are set by the Financial Services Commission (Fees and Administrative Penalties) Regulations, 2025, from 1 January 2026 (GFSC investment fees). The domicile comparison sets Guernsey against its peers. EU marketing follows AIFMD.
In practice: the fund's own particulars are its investment rulebook. A proposed material change to investment, borrowing or hedging powers needs prior notice to the GFSC (Rule 2.9(1)). Changes to asset types, limits, borrowing or hedging take effect only after holders get written notice in time to redeem (Rules 2.7(9) and 2.8(7)).
To verify
- Rule numbers. The published PDF does not print rule numbers beside its headings. Numbers on this page follow the Rules' own cross-references and the 2024 amendment; confirm against a numbered GFSC text.
- Retail distribution. The Rules set no investor test. Confirm in the GFSC's application forms or scheme conditions whether any restriction applies to marketing a Class B fund to retail investors.
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1 change to the law and guidance · latest 2024-12-20
- 2024-12-20 — The Authorised Collective Investment Schemes (Class B) (Amendment) Rules, 2024, made on 13 December 2024, came into force. They retitle Rule 5.2 and delete Rule 5.2(2) (unclaimed distributions to scheme property after six years) and Rule 8.3(3) (unclaimed winding-up proceeds after twelve months). Under Rule 3 they do not apply to schemes authorised before 20 December 2024, which keep both rules.