Jersey introduces new legal structure for alternatives funds
Jersey has introduced a revised regulatory regime for ‘Private Placement Funds’ aimed specifically at professional and sophisticated investors in the alternative finance sectors.
Ben Robins, partner and head of the funds practice at Mourant Ozannes, a law firm in Jersey, believes the move will give funds professionals and investors even further confidence in Jersey as a specialist centre for alternative fund business.
The new regime will apply to closed ended funds offered worldwide to fifty or fewer professional or sophisticated investors. The regime will sit within Jersey’s Control of Borrowing Order (COBO) regulatory framework. It will be of particular appeal to promoters of real estate, private equity, mezzanine, infrastructure and clean tech funds.
Mourant Ozannes says Private Placement Funds may be domiciled in or outside of Jersey but to fall within the regime they must have a Jersey manager and a Jersey regulated administrator responsible for assessing and certifying that the fund’s promoter satisfies criteria contained in the Jersey Financial Services Commission’s Private Placement Funds Guide. If the fund meets all the criteria, the JFSC will issue COBO consent to the fund within 72 hours.
Robins says: “Against the backdrop of the EU’s Alternative Investment Fund Managers Directive, Jersey should be able to offer structures (such as Private Placement Funds) marketable to EU professional investors through EU private placement regimes until at least 2018. Jersey Private Placement Funds will also be of appeal to promoters of alternative funds targeting professional and sophisticated investors outside the EU, including the US, Middle East and Asia.
He added: “In an era of global regulatory upheaval, this new regime will offer alternative fund promoters a streamlined and cost-effective regulatory environment, with a welcome degree of certainty.”