With effect from 2 July 2004 the Jersey Financial Services Commission (JFSC) has implemented a number of amendments to the Jersey Private Fund (JPF) regime, which seek to improve and enhance the JPF regime and keep pace with developments in the market for private funds.
The JPF regime was introduced in 2017 and provides a fast track (48 hour) regulatory approval process for private funds with 50 or fewer investors.
CARRY/CO-INVESTMENT
Co-investment vehicles can now be regarded as part of a JPF's carry/incentive arrangement and will not be counted as an investor for the purposes of the 50 or fewer investors test for JPF eligibility.
INVESTOR ELIGIBILITY
The guide now clarifies that investor eligibility criteria are satisfied on admission and can continue to be relied on notwithstanding a subsequent change in status of an investor, for example a departing employee or partner.
Where a transfer of an interest in a JPF occurs via a non-voluntary mechanism (e.g. death or bankruptcy) the transferee is not required to qualify on the same basis as the transferor, however, the transferee must itself meet the JPF eligibility criteria.
The category of professional investor has been extended by:
- replacing "senior employee" with "financially sophisticated employee", allowing a more inclusive approach to changing demographics within JPF fund management and/or advisory teams; and
- adding a reference to "expert consultant" to provide further flexibility.
GOVERNING BODY
The JFSC have clarified their expectation that there should be at least one or more Jersey resident directors appointed to a JPF board or to its governing body. From 2024 the JPF annual compliance return will request additional data to monitor this, by including an additional question asking how many Jersey resident or non-Jersey resident directors are on the board or governing body of the JPF.
ARRANGEMENTS THAT FALL OUTSIDE OF THE JPF REGIME
Amendments have been made to the section of the JPF guide which addresses arrangements which are not regarded as JPFs. These include certain family and/or family office arrangements as well as some incentive vehicles, for example carry and co-investment vehicles.
The definitions of employees and family connections, including the term "relative" have been broadened and now include trusts established for a person satisfying the wider definition of "family connection", not just trusts established for a specific person or their dependants.
The JFSC have also clarified their expectation that a JPF should be established in Jersey, or have its governing body and management and control in Jersey. Where a JPF is established in a country or territory outside of Jersey and does not have its governing body and management and control in Jersey, the JFSC will request additional data on the relevant JPF from its designated service provider in Jersey to establish the JPFs indirect, but relevant, nexus to Jersey.
ADDITIONAL CHANGES
In addition, the JPF guide has been amended to include consequential changes/references to the Money Laundering (Jersey) Order 206 and the JFSC's Outsourcing Policy.
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