Guernsey helps Chinese funds sector

Guernsey’s expertise within the funds industry is being utilised by the Chinese government and the country’s fund managers to enhance the way its own funds sector is operated and regulated.

Guernsey-headquartered International Administration Group (IAG), which formed a partnership with Exceedor in Shanghai last year, is at the centre of these discussions.

IAG’s relationship with Exceedor allows it to offer onshore RMB denominated private equity fund administration services in China and follows on from the establishment of its Hong Kong office in early 2011.

Julian Carey, managing director of IAG’s Hong Kong office, said discussions were concentrated on enhancing the reporting and corporate governance standards in China.

“Our joint venture partner in China headed up by Ms Yu Qi, has strong connections with the Shanghai Municipal Financial Services Office who have been tasked by Central Government to instigate an effective regulatory regime for private equity and hedge funds. To this end, the Financial Services Office has been interested in the way that Guernsey regulates its funds sector and IAG has been instrumental in explaining to them how our system in Guernsey works.”

Yu (pictured with Fiona Le Poidevin) has visited the island several times. Earlier this month she met IAG staff and senior management, as well as other local bodies, including Guernsey Finance – the promotional body for the Island’s finance industry.

She commented, “We are so pleased that the Shanghai authorities have asked IAG to explain the Guernsey regulations. This reflects the widely held view of the Island as being a quality, well regulated jurisdiction.”

Fiona Le Poidevin, deputy chief executive of Guernsey Finance, said it was encouraging to see IAG involved in discussions with the Shanghai Financial Services Office after it had become the first Guernsey fund administrator to set up in China to secure benefits from an opening up of the market to RMB investments both into and out of the country.

“The Shanghai Financial Services Office in many ways wants to replicate the systems we have in place in Guernsey to operate and regulate the funds sector….The Chinese funds sector in general is relatively young so the opportunity to work with the Chinese to help them better understand how our substantial funds sector operates is another chance to strengthen our links in a market we see as playing a big role in the Island’s future.

She said there have been similar moves by the Richmond Group in the fiduciary sector, making sure Guernsey is in the minds of Chinese financial services firms when it comes to opportunities to use offshore centres.

Guernsey Finance first established a representative office in Shanghai at the end of 2007. Since then, there have been delegations of politicians, regulatory officials and business representatives in both directions.

In 2010, Guernsey signed a Tax Information Exchange Agreement (TIEA) with the Chinese central government tax authorities and a Memorandum of Understanding (MoU) for exchange and cooperation with the Shanghai Financial Services Office.

The Island has also been given approval for companies incorporated in Guernsey to list on the Hong Kong Stock Exchange (HKEx).

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