The Protection of Investors (Bailiwick of Guernsey) Law, 2020
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The POI Law is Guernsey's single statute for investment business and funds. It does two jobs. Subject to its exemptions, it requires a licence to carry on, or hold out as carrying on, "controlled investment business" in or from the Bailiwick. It also lets the GFSC declare a fund an authorised or registered scheme. Every Guernsey fund rulebook is made under it, from the Class B and Class Q rules to the registered scheme rules and the PIF Rules 2025. It replaced the 1987 Law of the same name (section 80).
Scope and the core mechanism
The Law is built from two lists. Under section 1(3), a person carries on controlled investment business if, by way of business, it engages in a restricted activity in connection with a controlled investment. Schedule 1 lists the controlled investments, and Category 1 is collective investment schemes. Schedule 2 lists the nine restricted activities: promotion, subscription, registration, dealing, management, administration, advising, custody and operating an investment exchange.
The scheme definition is broad. Schedule 1, paragraph 1 catches any arrangement in which investors share in the profits from property but lack day-to-day control of it. The money must also be pooled, or the property managed as a whole. Paragraph 1(3) then carves out specific cases, each on its own conditions. Examples are arrangements where every investor is a company in the manager's group, and employee schemes holding group securities. Franchises, insurance contracts and occupational pension schemes are also out.
The fund mechanism is a declaration. Section 8 lets the GFSC declare a scheme an authorised or registered collective investment scheme of a specified class. Section 19 lets the GFSC write rules for each class. Section 7 then closes the loop, subject to section 44. A licensee may carry on a restricted activity by way of business for a scheme only if it is authorised or registered, and only within its conditions and class rules. The regulator's lever on each fund is its designated administrator, the person the GFSC designates for that scheme, on whom conditions are served (section 9).
Key provisions
| Provision | What it says | The practical point |
|---|---|---|
| Licensing duty (s.1) | Exemptions aside, a licence is needed for controlled investment business in or from the Bailiwick. Holding out is caught too. A Bailiwick body acting abroad needs a licence covering the business there too (s.1(2)). | A Guernsey manager running money from another centre is still caught. The licence must cover the activity as if done at home. |
| Scheme gate (s.7) | Subject to section 44, a licensee may carry on restricted activities only for an authorised or registered scheme, within its conditions and class rules (s.7). | Schedule 2, Note D narrows this for overseas schemes. Section 7 applies only where the manager is, or has delegated its duties to, a licensee. The same must be true of the custodian or trustee. |
| Declaration (s.8) | The GFSC may grant an application and declare the scheme authorised or registered, or refuse it. Before or after grant, the applicant must report changes as soon as practicable after learning of them, and within 14 days unless the GFSC sets another period (s.8(7A)). | An application is deemed withdrawn if information stays outstanding for three months (or a longer set period) and an unwithdrawn 14-day notice expires (s.8(7)). |
| Conditions (s.9) | The GFSC may impose, vary or rescind conditions by notice to the designated administrator. A condition may restrict promotion to the public in or from the Bailiwick (s.9(4)). | Breach is an offence by the scheme or its officers (s.9(5)). It is also a ground to suspend or revoke under the Enforcement Powers Law. |
| Scheme requirements (s.8(5), Sch 3) | A scheme must follow its class rules, carry a name that is not misleading, and have achievable purposes. An open-ended scheme must offer redemption at a price related to net asset value. The alternative is sale on a recognised investment exchange at a price not significantly different (Sch 3, para 4). | For an open-ended scheme, the designated administrator and the trustee or custodian must each be a company (Sch 3, para 5). |
| Class rules (s.19) | Rules may cover constitution, conduct and dissolution, administrator duties, investor rights, investment and borrowing powers, and issue and redemption (s.19). | Class rules contain the detailed requirements and operate subject to the Law. |
| Annual return (s.52) | The GFSC may require annual returns from licensees and from authorised or registered schemes (s.52). | The filing duty attaches to the scheme as well as the firms. The class rules say who files and when. |
Amendment history
| Date | Instrument | What changed |
|---|---|---|
| 1 Nov 2021 | Protection of Investors (Bailiwick of Guernsey) Law, 2020 (No. XVIII of 2020) | Brought into force by the Commencement Ordinance, 2021, per the note to section 83. Section 80 repealed the 1987 Law. |
| 1 Jan 2023 | Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022 (No. XIX of 2022) | Inserted section 8(7A), per the note to section 8. Applicants must report changes in their information, before or after grant. |
| 2023 | Guernsey Financial Services Commission (Transfer of Functions) (Fees) (Bailiwick of Guernsey) Ordinance, 2023 (No. VIII of 2023) | Listed as an amending instrument in the consolidated text. The sections it changed and their start date are in To verify. |
What it works with
The Law is the frame and the rulebooks are the product. The GFSC rulebooks made under it include the Class B Rules 2021, the Class Q Rules 2021 and the Authorised Closed-Ended Investment Schemes Rules 2021. For registered funds, see the Registered Collective Investment Scheme Rules 2021 and the Private Investment Fund Rules 2025. The Prospectus Rules 2025, in force from 1 July 2025, set prospectus content for registered schemes and some other offers. Rule 1.1(5) lists exclusions, and private investment funds are among them.
Jersey spreads the same ground across more instruments. The Collective Investment Funds (Jersey) Law 1988 certifies unclassified funds and grants permits to functionaries of recognized funds (Articles 5 and 8). The Financial Services (Jersey) Law 1998 registers fund service businesses. A Jersey Private Fund instead operates under a consent under the Control of Borrowing (Jersey) Order 1958. Summaries: CIF Law, FS Law, JPF. The JPF and the Guernsey PIF are both private-fund regimes, with different eligibility and regulatory requirements. For the wider choice, see the domicile comparison and the sub-threshold AIFM table.
In practice: section 7 makes the licensee, not just the fund, a point of enforcement. A licensee that carries on restricted activities for a scheme without a current declaration, or outside its conditions, can breach the Law itself, unless section 44 or Note D applies. Conditions are notified to the designated administrator, but the scheme and its officers also answer for breach under section 9(5).
To verify
- Status of the consolidated text. The Guernsey Legal Resources version states it is not authoritative. Confirm any section relied on in a filing against the official text held by the Greffier.
- 2023 Fees Ordinance. Confirm the commencement date of Ordinance No. VIII of 2023 and which sections it changed.
- Prospective Alderney amendments. The consolidated text notes that two Alderney partnership Laws of 2021 will amend the Law. Confirm whether they have commenced.
- Exempt persons. Section 44 and the exemption regulations remove some persons from the licensing duty. Confirm their current scope before relying on an exemption.
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