Islamic Asset Management and Fund Domicilation
Jersey’s funds sector is a leader of Islamic asset management. The jurisdiction is a preferred domicile for developed asset classes such as real estate, private equity, commodity and equity for Islamic fund mandates.
Funds in Jersey are regulated depending on the type of investors the fund has and also whether or not it is closed or open-ended. Sophisticated or institutional investors are subject to a lighter regulatory framework, provided that the offer document makes the risks involved in the fund clear.
Jerseys SPVs and Sukuk Structures
The Jersey finance industry has an established reputation for corporate structuring, and especially SPVs used for a variety of purposes. Historically, GCC Obligors would use a subsidiary company as an SPV. However, Shariah scholars have deemed this unacceptable and require that SPVs should be independent, enabling Jersey products to be used successfully with Sukuk structures.
Jersey-based SPVs have been used in connection with a wide variety of Shariah-compliant Islamic capital markets transactions. These have included structures established for the purpose of making investments off-balance sheet and securitising assets. A variety of legal vehicles are available including:-
- a Jersey incorporated company which issues Sukuk
- a limited partnership issuing partnership interests
- a trust issuing units or trust interests or certificates
Jersey companies are governed by the provisions of the Companies (Jersey) Law 1991 as amended (the “Companies Law”). A Jersey company in a Shariah-compliant transaction can usually be incorporated very quickly. An urgent incorporation service allows a company to be incorporated in less than twenty-four hours, if all the required information is supplied.
Regulation of Sukuk issues and other Islamic products is provided by the Jersey Financial Services Commission (the “JFSC”). The JFSC is familiar with Islamic products and they are processed in the same manner as other securities, as Jersey’s laws are broad enough to permit the issue of all types of Islamic instruments.
Islamic Private Wealth Management - Waqf, Jersey Trusts and Foundations
Due to the similarity of Waqfs and trusts, combined with Jersey’s international reputation for trust expertise, Jersey trusts appeal for generational wealth planning for multiple family groups and charitable/philanthropic institutions from the Gulf Region.
The Jersey Foundation, introduced in 2009, offers high-net-worth individuals in the Gulf Region an attractive alternative to trusts for holding wealth with a structure designed to meet their needs and allow a greater degree of control than is possible with trusts.