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Law Drafting contingency application for the Collective Investment Funds (Exempt Schemes or Arrangements) (Jersey) Order 200-

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A decision made (26/10/2007) regarding: Request for allocation of time from the contingency fund to enable the drafting of an Order exempting certain categories of fund from Collective Investment Funds Law (Jersey) 1998 (“the CIF Law”).

Decision Reference: MD-E-2007-0209

Decision Summary Title :

Law Drafting contingency application for Collective Investment Funds (Exempt Schemes or Arrangements) (Jersey) Order 200-

Date of Decision Summary:

24 October 2007

Decision Summary Author:

James Mews

Finance Industry Development Executive

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

 

Written Report

Title :

Law Drafting contingency application for Collective Investment Funds (Exempt Schemes or Arrangements) (Jersey) Order 200-

Date of Written Report:

24 October 2007

Written Report Author:

James Mews

Finance Industry Development Executive

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Public

Subject:

Request for allocation of time from the contingency fund to enable the drafting an Order exempting certain categories of fund from Collective Investment Funds Law (Jersey) 1998 (“the CIF Law”)

Decision(s):

The Minister for Economic Development sponsored a request that time be made available from the contingency fund for the drafting of this Order.

Reason(s) for Decision:

It is very important that the funds industry is able to offer a full product range to investors in order to remain competitive with other jurisdictions. Jersey lacks a very light touch or registration regime for those investors who are sophisticated or institutional, and industry have informed the Minister that there is a demand for such a model that provided simplicity, certainty and speed to the promoters. It is important this be introduced as early as possible to maintain Jersey’s international position.

Consultation has taken place with industry and the Commission who support the changes.

 

Resource Implications:

No measurable cost or manpower implications arise for the Commission, the States or industry.

Action required:

Legislation Request Questionnaire to be completed and signed by Minister and returned to the Finance Industry Executive to ensure that the law drafting is commenced as soon as possible.

Signature: Senator P.F.C.Ozouf

Position: Minister

Date Signed:

Date of Decision (If different from Date Signed):

Hide report
Law Drafting contingency application for the Collective Investment Funds (Exempt Schemes or Arrangements) (Jersey) Order 200-

MINISTER FOR ECONOMIC DEVELOPMENT

COLLECTIVE INVESTMENT FUNDS (EXEMPT SCHEMES OR ARRANGEMENTS) (JERSEY) ORDER 200-

(“THE ORDER”)

JERSEY FINANCIAL SERVICES COMMISSION (“THE COMMISSION”)



 

1 THE ISSUE

 

  1. Industry through Jersey Finance Limited (“JFL”) have requested that a new model of Jersey fund, offering a light touch registration regime for those investors who were sophisticated or institutional, be introduced as soon as possible. This would involve utilising a small amount of the law draftsman's drafting time to draft an Order to be considered for approval by the Minister. However, this work does not feature in this year's business plan.

 

  1. The Minister for Economic Development has approved (MD-E-2007-0193) the Law Draftsman prioritising the drafting of an Order and that the Finance Industry Development Executive takes the necessary steps in order for the Law Draftsman to be instructed and for the Order to be finalised and submitted to the Minister for his consideration as soon as possible.

 

  1. The Law Draftsman has reported that this work requires an allocation of time in the legislation programme.

 

  1. It is recommended that the Minister for Economic Development sponsors a request for allocation of Law Draftsman time from the contingency fund in order to enable this work to be progressed.

 

2 BACKGROUND

 

2.1 JFL and the Commission have discussed, over several months, the possibility of implementing an unregulated fund regime for sophisticated or institutional investors following widespread consultation by JFL within industry. Agreement has now been reached for the terms of such a proposed regime.

3 Proposals

  1. The proposed regime would introduce two exemptions to the requirements of the Collective Investment Funds (Jersey) Law 1998 (“the CIF Law”) under which the Commission regulates collective investment funds. These are firstly, unregulated eligible investor funds comprising only investors who invest over $1 million in the fund or who have special expertise by virtue of their employment, and secondly, exchange traded funds comprising funds who are listed on a stock exchange or market and who must comply with the rules of that stock exchange or market.
  2. Funds who met these criteria would not be required to comply with the requirements of the CIF Law and would be unregulated by the Commission in Jersey.
  3. It is believed that this regime could be achieved by the Law Draftsman drafting an order that set out the terms and conditions for such in accordance with the criteria agreed with the Commission under Article 3(7) of the CIF law.
  4. As the terms have been agreed by the regulator and the industry it is believed that it would be a fairly short task to prepare an Order.
  5. It is requested that this should become a priority and displace work in progress. Jersey has had since the late 1990's a successful and growing alternative fund industry but an unregulated fund offering is not offered. JFL reports that from industry research involving London Fund Promoters (hedge, property and real estate), Jersey lacks a very light touch or registration regime for those investors who were sophisticated or institutional and that there is a demand for a model that provided simplicity, certainty and speed to the promoters, one which did not incur an additional regulatory layer which provided little benefit to this type of investor.
  6. JFL believes that the introduction of this regime in Jan 2008 will provide a further catalyst for growth in the alternative funds arena and increase our market share from the existing 5% towards the very strong 47% share held by Cayman.

4 RECOMMENDATION

4.1 It is recommended that the Minister for Economic Development sponsor the request for allocation of time from the contingency fund.

 

JAMES MEWS

Finance Industry Development Executive

26 October 2007

 

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