Jersey is a first choice jurisdiction for alternative investment funds with a hugely flexible choice of funds and a leading position in the delivery of funds services. In 2011, it was the first ‘third country’ to announce a strategy of implementing an AIFMD ‘opt-in’ regime.
Since 22 July 2013, Jersey offers a fully compliant AIFMD regime for Europe whilst continuing to offer a ‘no-change’ solution for ‘rest-of-world’ jurisdictions.
All Jersey structures that are actively marketing into the EEA after 22 July 2013 need to take the following steps:
- check whether a cooperation agreement is in place between Jersey and the target EU jurisdiction; and
- consider the private placement requirements for the target EEA jurisdiction (using local legal counsel).
All Jersey structures that are actively marketed to professional investors into the EU have to comply with the annual report (Art 22), disclosure to investors (Art 23) and reporting to competent authorities (Art 24) provisions set out in the AIFMD. Private equity funds also need to assess whether they fall within the scope of Art 26(1) of the Directive and, if they do, comply with Articles 26 to 30 of the Directive relating to notification, disclosure and specific provisions for the annual report as well as ‘asset stripping’ provisions.
Unregulated Funds cannot be actively marketed into the EEA post 22 July 2013 but will be able to convert either to a ‘Jersey Eligible Investor Fund’ under the Jersey Eligible Investor Fund Guide or to a Listed Fund under the Jersey Listed Fund Guide.
For Jersey managers and depositaries that want to opt-in to a fully compliant AIFMD regime from 22 July 2013, the Jersey Financial Services Commission have created an authorisation regime based on the existing Financial Services (Jersey) Law 1998. This new authorisation regime simply mirrors the requirements of the AIFMD level 1 and level 2 texts.
On 30 July 2015 ESMA announced that it could see no obstacles to the extension of the AIFMD passport to Jersey and recommended that Jersey should be among the first wave of non-EU countries to get access to a Europe-wide passport under the AIFMD.
On 19 July 2016 ESMA published its second positive recommendation. ESMA confirmed that Jersey was one of only five non-EU jurisdictions to have no significant obstacles in being able to apply the passport.
Technically, the European Commission should adopt a delegated act in order to activate the relevant AIFMD provisions extending the passport within three months of a positive advice from ESMA. However, the Commission may wait until an adequate number of countries has been positively assessed.
A full regulatory overview is available on the JFSC website. For all new business enquiries please feel free to contact the Technical Team at Jersey Finance Limited. Please click here for the Jersey funds webpage.