Financial Services
(Investment Business (Special Purpose 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;
“special purpose investment business” has the meaning
given to that expression by Article 2;
“special purpose regulated scheme” has the meaning given
to that expression by Article 3;
2 Meaning of “special purpose investment business”
(1) In
this Order “special purpose 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 special purpose regulated scheme, that is,
buying, selling, subscribing for or underwriting investments, either as
principal or as agent;
(aa) making
arrangements in relation to a special purpose 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 special purpose 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 special purpose regulated
scheme;
(d) giving
investment advice to a special purpose 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 paragraph (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 “special purpose regulated scheme”
(1) In
this Order “special purpose regulated scheme” means an investment
scheme referred to in paragraph (2) or (3).
(2) An
investment scheme securities in which were in issue on 1st July 1999 is a
special purpose regulated scheme if –
(a) the
relevant consent had been issued in respect of the scheme before 1st
July 1999;
(b) it
was established for a special purpose; and
(c) except
in the case of a person who held securities in the scheme before 1st
July 1999, securities in the scheme are issued or allotted exclusively to
qualified professional investors.
(3) An
investment scheme is a special purpose regulated scheme if –
(a) the
relevant consent has been issued in respect of the scheme;
(b) it
was established for a special purpose; and
(c) securities
in the scheme are issued or allotted exclusively to qualified professional
investors.
(4) In
this Article –
“1958 Order”
means the Control of
Borrowing (Jersey) Order 1958;
“functionary”
means a person who, in relation to a special purpose 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 special purpose regulated scheme;
“investment
scheme” includes any investment arrangement;
“investment
warning”, in respect of an investor in a special purpose 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
the securities in question are only suitable for acquisition by a person
who –
(i) has a
significantly substantial asset base such that would enable the person to
sustain any loss that might be incurred as a result of acquiring such
securities, and
(ii) is
sufficiently financially sophisticated to be reasonably expected to know the
risks involved in acquiring the securities; 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” means 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 the person’s business;
“qualified professional
investor” means –
(a) a person
who is a professional investor; or
(b) a person
who has received and acknowledged an investment warning;
“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;
“special
purpose”, in respect of a special purpose regulated investment scheme,
means that the only or principal purpose of the scheme is the securitization or
repackaging of assets that involves the issue of securities or other capital
market transaction or category of capital market transaction as the Commission
may from time to time approve.[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 special purpose regulated
scheme, the person –
(a) acts
as a functionary; and
(b) carries
on special purpose 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 (Special
Purpose Investment Business – Exemption)) (Jersey) Order 2001.