The Jersey Private Fund
Rhea Hood, Director, CRM - EMEA
2017 update on the Jersey Private Fund
The Jersey Financial Services Commission (“JFSC”) have announced the introduction of a single Jersey Private Funds (“JPF”) regime for funds offered up to 50 professional investors. The JPF will replace the Very Private Fund and the Private Placement Fund regimes. Applications under the new JPF regime can be made from 18 April 2017. The JPF regime will provide a new streamlined fast-track regulatory authorisation process for the establishment of private investment funds. Upon receipt of a completed application from the Jersey regulated administrator (the “Designated Service Provider” (DSP)) the JFSC's published timescale for authorising a JPF is 48 hours.
A JPF is defined as a private investment fund involving the pooling of capital raised for the fund and which operates on the principle of risk spreading. Clarification has been provided by the JFSC that the following structures are not intended to fall within the definition of a JPF: Carry/incentivisation vehicles, holding companies, joint ventures, securitisation vehicles; and family office vehicles.
The key features of a JPF are as follows:
- It can be established as a Jersey company, limited partnership, limited liability partnership, separate limited partnership, incorporated limited partnership or a unit trust;
- It is not required to appoint Jersey resident directors;
- It can be open or closed ended;
- It is not required to appoint an auditor;
- It must appoint a Designated Service Provider to ensure that the JPF criteria and applicable AML legislation are complied with and to carry out due diligence on the promoter;
- It can only be marketed to Professional or Eligible Investors. (a professional investor is defined in the JPF Guide and one of the criteria for an eligible investor is that it invests a minimum initial commitment of not less than £250,000 (or currency equivalent);
- A JPF cannot be listed, including a technical listing;
- There is no requirement for a JPF to have an offer document; and
- Where a JPF is marketed into Europe and therefore is an "Alternative Investment Fund", Jersey's AIFMD and AIF Code of Practice will apply.
The DSP shall be responsible for:
- Making reasonable enquires to ensure that the JPF meets the eligibility criteria, including assessing the status of Professional and Eligible Investors both on its establishment and on a continuing basis;
- Ensuring that all necessary due diligence on the JPF and all related parties (including the promoter and service providers) is carried out;
- Ensuring that the JPF is complying with all AML/CFT requirements;
- Completing the application form;
- Notifying the JFSC of any material changes to the information supplied as soon as reasonably practical (and within 28 days); and submitting an annual compliance return.