Why Jersey: Key facts for Funds

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Beatrice Cole
5 years ago
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1 Why Jersey: Key facts for Funds

2 Jersey: key facts Jersey has a unique position as the first third country to offer a fully functional dual optin regime under AIFMD; Non-EU funds with a Jersey Manager are outside full compliance of AIFMD with easy access to capital through NPPR, reduced costs including no AIFMD depositary, no leverage requirements and low regulatory capital requirements and no remuneration rules or disclosure; Jersey Manager can access EU markets. Offshore is alive 77% of EU managers indicated they may choose to set up an offshore structure as a result of AIFMD (Multifonds, June 2013); Jersey enjoys easy access to the major UK investor market, with HM Treasury confirming NPPRs will definitely be in place until 2018; It is simple and cost effective to establish an SPV Jersey Manager; Jersey regulator and government are solution-driven and open for business; Seasoned and proven service providers across a variety of disciplines so substance/management of entities can be demonstrated on the ground (e.g. legal, administration, accounting, banking, custody etc.); Particular experience with private equity, real estate, and funds of hedge funds, but growing reputation for more emerging asset classes (e.g. mezzanine; infrastructure;). Funds Statistics Net asset value as at 30/09/13 Number of funds as at 30/09/13 194,839 million 1,348 Useful Contacts Name Website Telephone and Jersey Financial Services Commission Jersey Finance or info@jerseyfsc.org or jersey@jerseyfinance.je

3 Funds Set Up Time: Regulatory Approval of Funds Jersey has a truly unique funds offering with a wide range of flexible structures available ranging from highly regulated Recognized Funds which may be marketed widely to the general public through to Unregulated Funds. The jurisdiction is a well-known centre of excellence for alternative investment funds catering specifically for professional and sophisticated investors. The most frequently used fund categories are: 1. Expert Fund: self-certification of promoter/fund by Jersey administrator; 3 working days JFSC turnaround; can target over 50 offerees; no JFSC documentary review; can only target expert investors"; offer document content requirements; 2. Private Placement Fund: specifically designed for the professional and institutional investor market; no more than 50 offerees; highly flexible structure; no prescribed investment restrictions, concentration limits or leverage restraints; 3 working days JFSC turnaround; 3. Very Private (VP) Funds e.g. JPUTs and clubs : 5 working days JFSC turnaround; generally no documentary review; no offering document needed; can target up to 15 investors in total; must be no promotion of the investment; 4. Unregulated Eligible Investor Funds: no need for Jersey functionaries (other than basic administration); must only target "Eligible Investors" (e.g. those investing a minimum of US$1million with restrictions on transfer to non-eligible Investors) or be listed on a recognised exchange; and specified investor warnings in offering document ( caveat emptor ); not available for marketing into Europe but can switch to the new CIF Eligible Investor Fund. For the set up time for all other funds please see:

AIFMD Jersey is future proof - a Jersey manager can establish different Jersey funds to access: the EU through NPPRs the EU through passporting, from 2015 (when available) the rest of world only

4 AIFMD Jersey is future proof - a Jersey manager can establish different Jersey funds to access: the EU through NPPRs the EU through passporting, from 2015 (when available) the rest of world only Jersey enjoys easy access to the major UK investor market, with HM Treasury confirming NPPRs will definitely be in place until 2018 The AIFMD regulation in Jersey overlays the existing regime as follows:

5 Timescales for regulatory approval under AIFMD: AIF/Exempt notification (for CIFs): Same day JFSC turnaround; AIF application New: In line with relevant COBO fund application (see above); AIF Application where existing COBO Only Fund or COBO Private Placement Fund: 5 working days JFSC turnaround unless accompanied by an AIFSB application in which case 10 working days; AIF Application where existing COBO Very Private Fund: 10 working days JFSC turnaround. Service Providers Jersey has a large number of credible service providers with substantial presence: Provider Type Number of regulated providers Auditors Custodians Approx. 15 Approx. 15 dealing with fund matters Lawyers Approx. 12 dealing with fund matters Fund Administrators Approx. 30 Funds: Set up Costs Regulator Application Fees please also see the JFSC website: 1. AIF and AIF Services Business Application Fee AIF 1,000 Certified Funds are not required to pay an AIF application fee. Application Fee - AIF Services Business 1,000 Fund Services Businesses registered under Art 2(10) of the FS(J)L or Recognized Fund Functionaries are not required to pay an AIF Services Business application fee. 2. CIF Application fee CIF 1,600 Application fee Fund Service Provider 1,600

6 3. COBO-only funds There is no application fee for COBO-only Funds 4. Unregulated Funds There is no application fee for Unregulated Funds Regulator Annual Fees 1. AIF None 2. CIF Dependent on number of pools of assets, as per the following schedule: Number of pools of assets Fee 0-1 (a) where the certificate holder is a company issuing units or a trustee of a unit trust 2,700 (b) in any other case 1, , , , , , , , ,000 Service provider fees: This varies enormously depending on the complexity and the number of service providers involved.

7 Corporate Governance: Residency Requirements Very Private Fund Private Placement Fund Regime Expert Fund Unregulated Funds In a unit trust a managing trustee can be used with responsibility for all management functions, saving the need to appoint a separate manager. The managing trustee may delegate his/her duties on to others. Jersey company not less than two Jersey resident experience. Company established outside Jersey either (i) not less than two Jersey directors with appropriate experience must be appointed to the board of the fund or (ii) a Jersey company having not less than two Jersey resident directors with appropriate experience must be appointed as manager of the fund. Limited partnership at least one general partner which is either (i) a Jersey company which has not less than two Jersey resident experience (ii) itself a limited partnership that has at least one general partner which is a Jersey company which has not less than two Jersey resident directors with appropriate experience. Unit trust and the manager (or single managing trustee, if applicable) must be a Jersey company which has not less than two Jersey resident experience. Depends on how fund is established. a) Company at least two Jersey resident directors with appropriate experience must be appointed. b) Limited partnership or unit trust a Jersey entity with at least two Jersey resident experience should act as general partner or trustee, as the case may be. An administrator, a manager and/or, when a closed fund is a unit trust, a trustee which has at least two Jersey resident experience, staff and physical a physical presence in the Island must be appointed by the fund. The administrator, manager or trustee must have a paid-up share capital of 25,000. Arrangements for the safe custody of the property of the fund are required. Separate custodian with staff and physical presence in Jersey is required for an open-ended fund, but not a closed-ended fund. If it is a hedge fund the custodian requirement is waived if a prime broker with minimum credit rating of A1/P1 is appointed. Registered office of a company to be provided by a person registered under FS(J)L. Disclaimer - This document is provided for general information purposes only and does not constitute or offer legal, financial or other advice upon which you may act or rely. Specific professional advice should be taken in respect of any individual matter. Whilst every effort has been made to ensure the accuracy and completeness of the information contained herein, Jersey Finance cannot be held liable for any error or omission.

Jersey for Funds. Delivering Expertise, Flexibility and Innovation.

Jersey for Funds. Delivering Expertise, Flexibility and Innovation. Jersey for Funds Delivering Expertise, Flexibility and Innovation www.jerseyfinance.je Jersey for Funds P1 A Tradition of Funds Expertise Jersey has been at the forefront of services for more than 50 years.