Financial Services
(Investment Business (Restricted Investment Business – Exemption))
(Jersey) Order 2001
THE ECONOMIC DEVELOPMENT COMMITTEE, in
pursuance of Articles 4(1)(a)(i) and 7(2)(a)(ii) of the Financial
Services (Jersey) Law 1998, and on the recommendation of the
Jersey Financial Services Commission orders as follows –
Commencement [see endnotes]
1 Interpretation
In this Order –
“Commission”
means the Jersey Financial Services Commission;
“Law” means the Financial Services (Jersey)
Law 1998;
“professional investor regulated scheme” has the meaning
given to that expression by Article 3;
“restricted investment business” has the meaning given
to that expression by Article 2.
2 Meaning of “restricted investment business”
(1) In
this Order “restricted investment business” means the carrying on
of all or any of the following activities by way of business –
(a) dealing
in investments in relation to a professional investor regulated scheme, that
is, buying, selling, subscribing for or underwriting investments, either as
principal or as agent;
(aa) making
arrangements in relation to a professional investor regulated scheme for
another person (whether as principal or agent) to buy, sell, subscribe for or
underwrite investments;
(b) dealing
in investments in relation to investors in a professional investor regulated
scheme, that is buying or selling investments, either as principal or agent;
(c) discretionary
investment management, that is, deciding as agent to buy, sell, subscribe for
or underwrite investments for or on behalf of a professional investor regulated
scheme;
(d) giving
investment advice to a professional investor regulated scheme, that is, giving
advice on the merits of –
(i) the purchase,
sale, subscription for or underwriting of a particular investment, or
(ii) the
exercise of rights, conferred by an investment, to acquire, dispose of,
underwrite or convert an investment.[1]
(2) In paragraphs (1)(a)
and(b) –
(a) “buying”
includes any acquisition;
(b) “selling”
includes any disposal.
(3) In paragraph (2)(b)
“disposal” includes –
(a) in
the case of an investment consisting of rights under a contract or other arrangements,
assuming the corresponding liabilities under the contract or arrangements;
(b) in
the case of any other investment, issuing or creating the investment or
granting the rights or interests of which it consists;
(c) in
the case of an investment consisting of rights under a contract, surrendering,
assigning or converting those rights.
3 Meaning of “professional investor regulated scheme”
(1) In
this Order “professional investor regulated scheme” means an
investment scheme referred to in paragraph (2) or (3).
(2) An
investment scheme securities in which were in issue 1st July 1999 is a
professional investor regulated scheme if –
(a) the
relevant consent had been issued in respect of the scheme before 1st
July 1999; and
(b) each
investor in the scheme, other than an investor who held securities in the
scheme before 1st July 1999, received and signed an investment warning.
(3) An
investment scheme is a professional investor regulated scheme if –
(a) the
relevant consent has been issued in respect of the scheme; and
(b) each
investor in the scheme –
(i) has made a
minimum subscription of £250,000 or is a professional investor, and
(ii) has
received and signed an investment warning.
(4) In
this Article –
“1958 Order”
means the Control of
Borrowing (Jersey) Order 1958;
“functionary”
means a person who, in relation to a professional investor regulated scheme,
acts as an agent or counter-party, and includes a manager, investment manager,
advisor, investment advisor, administrator, paying agent, distributor,
subscription agent, placement agent, sales agent, dealer, trustee, custodian,
custody agent, depository or general partner of the professional investor
regulated scheme;
“investment
scheme” includes any investment arrangement;
“investment
warning”, in respect of an investor in a professional investor regulated
scheme, means a warning issued in accordance with the terms of an offer
relating to the subscription, purchase or exchange of securities made or to be
made pursuant to an offer document stating –
(a) that
an investment in the scheme is only suitable for sophisticated investors who
understand the risks involved in acquiring such an investment; and
(b) that
neither the scheme nor the activities of any functionary with regard to the
scheme are subject to all the provisions of the Financial
Services (Jersey) Law 1998,
or a warning with words to
the like effect approved by the Commission;
“professional
investor”, in respect of a professional investor regulated scheme, means –
(a) a person
whose ordinary activities involve the person in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of the person’s
business or who it is reasonable to expect will acquire, hold, arrange or dispose
of investments (as principal or agent) for the purposes of that business;
(b) any person
who carries on investment business in relation to the professional investor
regulated scheme;
(c) any
employee of a person referred to in paragraph (b) who is engaged in
carrying on investment business in relation to the professional investor
regulated scheme and, where the person referred to in paragraph (b) is a
company, any director of that company and, where the person referred to in paragraph (b)
is a partnership, any partner of that partnership; or
(d) any
company which is wholly owned by, or a limited partnership all the limited
partners of which are, or a trust established for the benefit only of, one or
more persons referred to in paragraph (b) or (c);
“relevant
consent”, in respect of an investment scheme, means –
(a) in
the case of a body corporate (other than a limited liability company registered
as a body corporate under the LLC Law), the consent of the Commission under Article 1,
2, 3 or 4 of the 1958 Order to the issue of securities in connection with
the scheme or to the raising of money in Jersey by the issue of such
securities;
(b) in
the case of a unit trust, the consent of the Commission under Article 9(1)
of the 1958 Order to the issue of securities in connection with the scheme
or to the raising of money in Jersey by the issue of such securities;
(c) in
the case of a limited partnership, the consent of the Commission under Article 10
of the 1958 Order to the creation of securities in connection with the
scheme or to the raising of money in Jersey by the creation of such securities;
or
(d) in
the case of a limited liability company, the consent of the Commission under Article 4A
or Article 11A of the 1958 Order to the creation of securities or LLC
interests or to the raising of money in Jersey by the creation of securities or
LLC interests;
“securities”
means bonds, notes, commercial paper, debentures, debenture stock, instruments
creating or acknowledging indebtedness, shares, units or interests under a
limited partnership or LLC interests.[2]
4 Exemption
(1) In
accordance with Article 7(2)(a)(ii) of the Law it is declared that the Law
shall not apply to a person when, in relation to a professional investor
regulated scheme, the person –
(a) acts
as a functionary; and
(b) carries
on restricted investment business.
(2) In
accordance with Article 4(1)(a)(i) of the Law, it is declared that the
exemption conferred by paragraph (1) is amended so that it is limited to Article 7
of the Law.
(3) Articles 12,
23, 24, 25, 26, 28, 32, 33, 34, 35, 36, 37, 38, 39 and 41 of the Law shall
continue to apply to a person exempted from registration by virtue of paragraph (1)
as if the person were a registered person.
(4) A
reference to registered persons in those Articles and the reference to persons
registered by the Commission in Article 5 of the Law shall be construed
accordingly.
(5) In
this Article “functionary” has the same meaning as in Article 3.
5 Citation
This
Order may be cited as the Financial Services (Investment Business (Restricted
Investment Business – Exemption)) (Jersey) Order 2001.