Jersey R & O 11/2001
Financial Services (Jersey) Law 1998
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FINANCIAL
SERVICES (INVESTMENT BUSINESS (SPECIAL PURPOSE INVESTMENT BUSINESS -
EXEMPTION)) (JERSEY) ORDER 2001
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THE FINANCE AND ECONOMICS COMMITTEE, in pursuance of Articles 4(1)(a)(i) and
6(2)(a)(ii) of the Financial Services (Jersey) Law 1998, as amended, and on the
recommendation of the Jersey Financial Services Commission orders as follows -
Interpretation
1.-(1) In this Order -
“Commission” means
the Jersey Financial Services Commission;
“Law” means the
Financial Services (Jersey) Law 1998;
“special purpose
regulated scheme” has the meaning given to that expression by Article 3;
“special purpose
investment business” has the meaning given to that expression by Article 2.
(2) A reference in this Order to an Article by
number alone is a reference to the Article of that number in this Order, and a
reference in an Article or other division of this Order to a paragraph by
number alone is a reference to the paragraph of that number contained in the
Article or other division of this Order in which that reference occurs.
(3) A reference in this Order to an enactment
is a reference to that enactment as amended by any subsequent enactment.
Meaning of “special purpose
investment business”
2.-(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;
(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.
(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.
Meaning of “special purpose regulated scheme”
3.-(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; and
(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; and
(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 him 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 him in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of his business or who it is reasonable to expect will acquire, hold,
arrange or dispose of investments (as principal or agent) for the purposes of
his 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, the
consent of the Commission under Article 3, 4, 4A or 4B 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; or
(b) in the case of a unit trust, the consent of
the Commission under Article 7(1) of the 1958 Orderto the issue of securities in connection with
the scheme or to the raising of money in Jersey by the issue of such
securities; or
(c) in the case of a limited partnership, the
consent of the Commission under Article 8 of the 1958 Orderto the creation of securities in connection
with the scheme or to the raising of money in Jersey by the creation of such
securities;
“securities” means bonds, notes,
commercial paper, debentures, debenture stock, instruments creating or
acknowledging indebtedness, shares, units or interests under a limited
partnership;
“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.
Exemption
4.-(1) In accordance with
Article 6(2)(a)(ii) of the Lawit 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 6 of the Law.
(3) Articles 10A, 20, 21, 22, 23, 25, 29, 30,
31, 32, 33, 34, 35, 36, and 38 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.
Revocation
5. The Investment Business (Exemption No. 1A)
(Jersey) Order 1999 shall be revoked.
Citation and commencement
6. This Order may be
cited as the Financial Services (Investment Business (Special Purpose
Investment Business - Exemption)) (Jersey) Order 2001 and shall come into
force on the second day of February 2001.
By Order of the Finance and
Economics Committee,
C.M.
NEWCOMBE
Greffier of the States.
12th January
2001.
Explanatory Note
R & O 11/2001
Financial
Services (Investment Business (Special Purpose Investment Business -
Exemption)) (Jersey) Order 2001
Finance
and Economics Committee
This
Order revokes and replaces the Investment
Business (Exemption No. 1A) (Jersey) Order 1999 and is necessary solely as a
consequence of the changes brought about by the Financial Services (Extension)
(Jersey) Law 2000. It introduces no new provisions.
The purpose of this Order is to
exempt advisors in respect of certain regulated investment schemes known in the
financial industry as “special purpose vehicles” from the obligation to
register under the Financial Services (Jersey) Law 1998 (formerly called the
Investment Business (Jersey) Law1998).
The Order also includes provisions
by which certain powers of the Jersey Financial Services Commission under the
Financial Services (Jersey) Law 1998 will continue to be applicable in respect
of persons exempted from registration under the Law.
The
Order was made on 12th January 2001 and comes into force on 2nd February 2001.