JERSEY Law and Practice Contributed by: Nienke Malan and Christopher Griffin, Carey Olsen
funds or other schemes aimed at “Expert Inves - tors”. An Expert Fund can be established quickly and cost-effectively, and must comply with the Jersey Expert Fund Guide (the “EF Guide”). The JFSC does not need to review the fund struc - ture, documentation or the promoter. Instead, the fund administrator certifies to the JFSC that the fund complies with the EF Guide and, once the certification and the fund’s offer document are filed, the JFSC aims for a three-day turna - round on the application for approval. The EF Guide provides fund promoters with certainty, efficiency and cost-effectiveness in the estab - lishment of a new fund. The key features of an Expert Fund are as follows. • Open only to those investing at least USD100,000 or who otherwise qualify as Expert Investors (that is, investors with a net worth of more than USD1 million (excluding their principal place of residence) or who are in the business of buying or selling invest - ments). Investors must sign a prescribed form of investment warning (usually contained in the subscription document). • Discretionary investment managers may invest on behalf of non-Expert Investors, pro - vided they are satisfied that the investment is suitable for them and they are able to bear the economic consequences of the invest - ment. • May be open-ended (open for redemption at the option of investors) or closed-ended (no absolute investor right to redeem). • At least two Jersey resident directors with appropriate experience must be appointed to the fund board (or, if applicable, the board of the general partner or trustee). • A licensed Jersey manager or administrator which has two Jersey-resident directors with appropriate experience and staff and a physi -
cal presence in Jersey is required (unless the fund is a unit trust with a Jersey trustee). • A Jersey custodian is needed if the fund is open-ended (or an international prime broker, in the case of a hedge fund). • The offer document must set out all material information in respect of the fund. • The fund must be audited. • The investment manager/adviser must be: (a) established in an OECD member or any other state or jurisdiction with which the JFSC has entered into a memorandum of understanding; (b) regulated in its home jurisdiction (or, if not required to be so regulated, approved by the JFSC); and (c) without convictions or disciplinary sanc - tions, solvent, and experienced in using similar investment strategies to those adopted by the fund. • If the investment manager/adviser does not meet the above requirements, it may approach the JFSC on a case-by-case basis. Of course, if permission is granted, absent any material change, the investment man - ager/adviser will not need specific approval to establish further Expert Funds. • An investment manager/adviser is not required for certain self-managed funds, such as direct real estate or feeder funds. • There are no investment or borrowing restric - tions imposed on the fund, nor is there any limitation on the number of investors the fund may have. • The EF Guide aims to make a “safe harbour” available to the majority of non-retail funds. On occasion, where derogations from the EF Guide are required, these are considered on an expedited basis. • Ongoing requirements are limited. Future changes to the fund generally do not require regulatory approval unless they are contrary
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