Jersey Private Placement Funds
Mike Lombardi – Ogier
Ben Robins – Mourant Ozannes
Roy Geddes - JFSC
JFSC Promoter Policy Test for Public Funds
1. Prior relevant experience in operating
equivalent funds in equivalently
regulated jurisdictions
2. International (or National) reputation
3. Significant Capital resources
4. Wide spread of ownership
Regulatory Trade-off
1. Institutional / professional investors
health warning
2. Investment commitment £250k (or
professional)
3. Investor headcount cap of 50
4. Closed-ended
5. PPM content requirements
AIFMD
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All EU funds to distribute by Passporting
Depository Custodian
Independent valuation function
Leverage constraints / concentration limits
Enhanced reporting requirements
(portfolio composition / manager
remuneration)
Ben Robins
Partner,
Mourants Ozannes
Eligible Structures
Whatever the legal form, must be closed ended
Must not be CIF
• corporate: can be a company (including a protected cell
company, an incorporated cell company or any cell thereof) or
• partnerships: one or more partnerships (including limited
partnerships, limited liability partnerships, separate limited
partnerships or incorporated limited partnerships) or
• unit trust
NB includes Jersey structures and non-Jersey ("non-dom")
structures where incorporated/constituted in equivalent form
in their home country
Management Requirements
Jersey company: must appoint not less than 2 Jersey resident directors with
appropriate experience
Non-Jersey company: either (a) not less than 2 Jersey resident directors with
appropriate experience on its own board or (b) a Jersey company, with not less
than 2 Jersey resident directors with appropriate experience, is appointed as its
manager
Partnership(s) (whether Jersey or non-Jersey): at least one GP which is
either (a) a Jersey company with not less than 2 Jersey resident directors with
appropriate experience; or (b) itself a limited partnership, at least one of the
GP's of which is a Jersey company with not less than 2 Jersey resident
directors with appropriate experience
Unit trusts (whether Jersey or non-Jersey): each of the trustee and manager
(or single managing trustee, if applicable) must be a Jersey company with not
less than 2 Jersey resident directors with appropriate experience
These Jersey management entities are held specifically responsible for the
management and control of the fund
Administration Requirements
Fund must be administered by an administrator which is a
"Designated Service Provider", meaning:
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must be registered by JFSC to carry on Fund Services Business as an
administrator under FS(J)L and cannot be a "managed entity" as defined
under the FSB Codes of Practice
NB: Trust Company Business licence alone is NOT sufficient
Role of administrator/DSP:
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must provide R/O to the relevant company, limited partnership or unit trust
trustee/manager (or to the relevant local management entities of a nonJersey structure)
carrying out promoter due diligence and making required certifications in
JFSC application re promoter and PPM content requirements
support the Fund with its anti-money laundering obligations (MLRO/MLCO)
submit stats to JFSC on behalf of the Fund
Professional/Sophisticated Investors (1)
Only "Professional Investors", "Sophisticated Investors" and/or
investment managers acquiring an interest for or on behalf of nonprofessional or non-sophisticated investors, each of whom have
received and acknowledged an investment warning (substantially in the
form set out in the JPPF Guide) may invest in the Fund
Sophisticated Investor definition: an investor who makes a minimum
initial investment or investment commitment of £250,000 (or currency
equivalent) in the Fund, whether through the initial offering or
subsequent acquisition
Professional Investor definition: many categories but includes:
persons who habitually invest (as principal or agent) by way of
business; HNW structures (with assets >USD10M); certain "Eligible
Employees" of the Fund's investment manager/advisor who themselves
carry on investment business in relation to the fund; and senior
employees, directors, partners, shareholders or consultants in the Fund
or its management/advisory team receiving interests by way of
remuneration/carry. Read the definitions carefully!
Professional/Sophisticated Investors (2)
Remember: investment warning required by the JPPF
Guide must be in the PPM and must be acknowledged in
writing (by counter-signature) by each investor (or their
investment manager, where applicable), most probably in
the subscription document which can repeat the warning.
Caution: inter-action with "Professional Investor Regulated
Scheme" exemption under FS(J)L, where a service
provider (eg local GP/manager/trustee) is relying on an
investment business and/or trust company business
exemption:
Remember: the Professional Investor definition in PIRS
exemption is narrower, although £250k minimum
investment limit is the same as the "Sophisticated Investor"
limit in the JPPF Guide.
PPM content requirements
PPM to contain "all such material information which investors would
reasonably require" including (without limitation):
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key subscription terms
investment strategy (and associated risks) and, if relevant, use of leverage
valuation methodology
capital structure of the Fund
voting arrangements
fees and expenses
material contracts
conflicts of interest
registered office/location of register
management structure (director and adviser details)
custody arrangements
term of fund
regulatory matters: responsibility statement (by Fund directors or
management entity); JFSC exculpation language and investor warning
Application procedure
COBO consent to issue of units issued by the JFSC on a fast-track,
self-certification procedure relying upon receipt of:
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a written statement from the promoter to the JFSC: confirming that it
satisfies the promoter requirements set out in the JPPF Guide, countersigned by the administrator/DSP certifying that it has carried out its own
general due diligence in relation to the promoter and has no reason to
believe that the promoter's statement is incorrect;
a written certificate of the Fund's administrator/DSP certifying that in the
opinion of such person having completed appropriate enquiries that the
Fund's PPM complies with the content requirements;
a draft copy of the PPM (note requirements in relation to translation of nonEnglish language PPMs); and
details (full name, date of birth and residential address) of all of the
promoter's Principal Persons, including those named in the PPM.
The JFSC issue the requisite COBO consent within 3 working days from
receipt of correctly completed application.
On-going Requirements
• Fund must be audited and must deliver to JFSC of a copy of Fund's
accounts if qualified (and details of such qualification to be brought
to JFSC' attention immediately)
• material changes to the Fund which would not meet the criteria in
the JPPF Guide will require prior JFSC written approval
• other material changes to the information submitted to the JFSC to
be notified to the JFSC a.s.a.p. and in any event within 28 days
• appointment of MLRO/MLCO (via administrator/DSP)
Roy Geddes
Deputy Director, Securities,
Jersey Financial Services Commission
Private Placement Fund
• Designated Service Provider (DSP) – an
FSB Administrator – for AML / CFT
purposes
• Promoter policy not applied instead
promoter declaration certified by DSP that
promoter is of good standing
Private Placement Fund
• DSP must have CDD in place and we may ask for
CDD to be submitted after PPF application
• Regulatory checks completed after the issue of the
COBO – new approach
• Fast track issue (72 hours) issue of COBO consent
based on meeting PPF Guide requirements
• PPF Fund accounts to be audited but submitted
only on an exceptional basis
• Fees Consultation
Private Placement Fund
• Consultation Paper on charging for PPF
COBO consent to follow – JFA / JFL body
has agreed in principle to a charge to
cover additional costs
• Existing COBO regime still available if
needed
• PPF Application form and PPF Guide are
on website http://www.jerseyfsc.org
Download

26 January 2012 Jersey Private Placement Funds