GUERNSEY Law and Practice Contributed by: Matthew Brehaut, Carey Olsen
• no requirement for minimum investment; • no requirement for a prospectus; • a maximum of 50 legal or natural persons holding an economic interest (with no more than 30 admitted in a 12-month period); and • no limit imposed on the number of potential investors to which the fund can be marketed. Route 2 A “Qualifying Private Investor” PIF is available to investors who can evaluate the risks and strat - egy of investing in a PIF and bear the conse - quences of investment, including the possibil - ity of any loss arising from the investment. The relevant rules define a “Qualifying Professional Investor” as a “professional investor”, “experi - enced investor” and “knowledgeable employee” (the criteria for each of which are specified in the rules). Qualifying Private Investor PIFs are also sub - ject to a maximum of 50 legal or natural per - sons holding an economic interest in the fund. Marketing can take place to a maximum of 200 people. Investors must be provided with a disclosure statement that states all material information (including risk disclosures) that an investor would reasonably require to make an informed judgement about the merits and risks of investing in the PIF, as well as certain pre - scribed disclosures. The administrator must make a declaration to the GFSC that effective procedures are in place to restrict the fund to Qualifying Professional Investors. The adminis - trator should also receive written acknowledge - ment of receipt of the above-mentioned disclo - sure statement from investors. Route 3 A “Family Relationship” PIF is available to inves - tors who share a family relationship (or are an employee of the family). The Family Relationship
PIF cannot be marketed outside the family (and employee) group. The administrator must make a declaration to the GFSC that effective proce - dures are in place to ensure that all investors fulfil the requirement of being related as a family (or employee). Qualifying Investor Funds (QIFs) An authorised fund may apply to the GFSC to be approved as a QIF, following which the GFSC’s QIF Guidance will apply to it in addition to the authorised rules to which it is already subject. QIFs may only admit investors which are: • “professional investors” The QIF must have a promoter (ie, the party ultimately responsible for the fund’s success) that is fit and proper. There must be effective procedures in place to ensure that only qualify - ing investors are admitted, and the economic rationale for the fund and any attendant risks must be clearly disclosed. QIFs may be open- or closed-ended. The GFSC’s standard application procedure for authorised funds (ie, Class A funds, Class B funds, Class Q funds and ACIS funds) that do not elect to be approved as QIFs is a three-stage process: • stage one – outline authorisation; • stage two – interim authorisation; and • stage three – formal authorisation once all issues have been resolved and final docu - • “experienced investors”; or • “knowledgeable employees”. mentation has been received. Core documents are as follows: • constitutional documents of the fund vehicle;
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