Guernsey: Licensing Under The POI Law

The POI Law requires anyone who carries on "controlled investment business" in or from within the Bailiwick of Guernsey to hold a licence issued by the GFSC under the POI Law (a "POI Licence"; a "POI Licensee").

"Controlled investment business"

Carrying on controlled investment business involves three elements:

  • engaging in a "restricted activity"; which is
  • in connection with a "controlled investment"; and which is done
  • by way of business.

Restricted activities, listed at Schedule 2 of the POI Law, are promotion, subscription, registration, dealing, management, administration, advising and custody1, 2

Controlled investments are listed in Schedule 1 of the POI Law, which includes collective investment schemes, general securities and derivatives.

"By way of business" is not defined but an element of payment or compensation above de minimis levels is normally required.

Who needs a POI Licence in respect of a Guernsey fund?

Given the above criteria, most activities performed by service providers in Guernsey to Guernsey funds will usually require a POI Licence. In particular:

  • The administrator. The POI Law and the various rules governing Guernsey funds require a body corporate, Guernsey domiciled POI Licensee as the "designated manager" or "designated administrator" (for simplicity, the term we have used throughout these materials is "administrator").
  • The custodian. For open-ended funds, and subject to limited exemptions for PIFs and hedge funds, the POI Law and the various rules governing Guernsey funds require a body corporate, Guernsey domiciled POI Licensee as the "designated custodian" or "designated trustee".
  • The manager.
  • The general partner.
  • The trustee.

Who doesn't need a POI Licence in respect of a Guernsey fund?

  • Any service provider to a Guernsey fund which is not incorporated in Guernsey and which is not carrying on regulated business in Guernsey. This typically includes foreign investment managers and investment advisers. Although they may be providing restricted activities to a controlled investment, they are not providing it in or from within the Bailiwick of Guernsey.
  • Individuals. The POI Law provides for the licensing of entities, not individuals. The directors of the fund, the general partner, the manager etc. are therefore not licensed.

The application process

The GFSC may grant or refuse an application at its discretion and, in considering whether or not to grant a licence, the GFSC is required to have regard to the need to protect the public and the reputation of the Bailiwick as a financial centre. Among the matters which the GFSC must take into account in reaching a decision are whether the applicant is a fit and proper person to carry on the business proposed and the manner in which it is proposed to organise the carrying on of the business to which the application relates.

The GFSC has power to impose conditions on a licensee either on the granting of a licence or at any time after its issue and also to cancel or suspend a licence in certain specified circumstances.

POI Application

Each applicant is required to have adequate resources of personnel, policy, procedures, premises and systems to conduct operations including:

  • record-keeping;
  • compliance;
  • anti-money laundering measures; and
  • internal control and other systems.

If the applicant proposes to delegate some responsibilities to other service providers, the arrangements must be acceptable to the Commission and demonstrate that the delegate has the necessary capability.

Each applicant must also meet the capital requirements specified by the Licensees (Capital Adequacy) Rules 2010.

An application is made by submitting an investment licence application pack to the GFSC, containing:

  • an application "Form RA/1";
  • a business plan showing the applicant's proposed business activities;
  • a three-year budgeted balance sheet and profit and loss account;
  • documentary evidence relating to the beneficial ownership of the applicant;
  • copies of any agreements whereby management of the applicant has been delegated;
  • evidence of the incorporation or establishment of the applicant;
  • evidence of appropriate director's and officer's insurance cover;
  • evidence of an auditor's willingness to act;
  • a business risk assessment;
  • financial statements of the applicant (if applicable);
  • documentary evidence as to the share capital of the applicant;
  • a letter from a director confirming that the capital requirements specified by the Licensees (Capital Adequacy) Rules 2010 are satisfied; and
  • the application fee (currently £2,322).

An online personal questionnaire must be submitted through the GFSC's "Online PQ Portal" for each natural person who is a beneficial owner, controller, partner, director, company secretary, Money Laundering Reporting Officer, Compliance Officer or manager of the applicant.

Upon receipt, the GFSC will assess and review the application pack and inform the applicant, or its professional advisers, of any matters requiring expansion or clarification.

The GFSC aims to respond to applicants within 28 business days of receipt of a fully completed application pack. A "Fast Track Licence" ("FTL") can be issued within an accelerated timescale (10 business days) for parties seeking to provide management services to Qualifying Investor Funds or registered funds. The intention of the FTL regime is to enable a fund application and a POI Licence application to be submitted for simultaneous consideration by the GFSC.

The GFSC will also accept POI Licence applications under the FTL regime in advance of a fund application for Guernsey managers needing to meet the requirements of the EU National Private Placing Regime. In such circumstances, the licence application pack must also include details about the fund's investment objectives, investment strategy, asset classes, target investors and geographical marketing sector.

Footnotes

1 Note A to Schedule 2 specifies that party A is performing a restricted activity where he contracts with party B for party B to perform a restricted activity.

2 Note C to Schedule 2 excludes joint enterprises and activities between group entities from being restricted activities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions