Collective
Investment Funds (Unregulated Funds) (Jersey) Order 2008
Made 18th February 2008
Coming into force 19th
February 2008
THE MINISTER FOR ECONOMIC DEVELOPMENT, in pursuance of Articles 3 and 20 of the
Collective Investment Funds (Jersey) Law 1988[1] and on the recommendation of the
Jersey Financial Services Commission, orders as follows –
1 Interpretation
(1) In
this Order –
“closed fund” means
a fund that is not open for redemptions at the option of holders of units in
the fund;
“financial service business”
has the same meaning as in the Financial Services (Jersey) Law 1998[2];
“functionary” in
relation to a fund means any person who is by way of business –
(a) a
manager, manager of a managed entity, administrator, registrar, investment
manager or investment adviser;
(b) a
distributor, subscription agent, redemption agent, premium receiving agent,
policy proceeds paying agent, purchase agent or repurchase agent;
(c) a
trustee, custodian or depositary; or
(d) a
member (except a limited partner) of a partnership, including a partnership
constituted under the law of a country or territory outside Jersey,
in relation to the fund;
“fund” means scheme
or arrangement;
“fund company” means
in relation to a fund any of the following companies –
(a) if
the fund is a company incorporated under the Companies (Jersey) Law 1991[3], that company;
(b) if
the fund is a limited partnership (within the meaning of the Limited
Partnerships (Jersey) Law 1994[4]), any of its general partners
that are companies incorporated under the Companies (Jersey) Law 1991; or
(c) if
the fund is a unit trust, any of its trustees, or managers, that are companies
incorporated under the Companies (Jersey) Law 1991;
“fund services business”
means the business of being, in relation to a fund and by way of business,
anything specified in sub-paragraphs (a) to (d) of the definition of
“functionary” in this paragraph;
“the Law” means the
Collective Investment Funds (Jersey) Law 1988[5];
“registrar” means
the registrar of companies appointed pursuant to Article 196 of the
Companies (Jersey) Law 1991;
“unregulated fund” means
a fund that, but for the operation of Article 2, would constitute a
collective investment fund for the purposes of the Law.
(2) For
the avoidance of doubt it is hereby declared that –
(a) a
person who by way of business provides a registered office, or a business
address, for a fund company is, for the purposes of this Order, a functionary
who carries on fund services business in relation to the relevant fund; and
(b) the
provision of the registered office or business address is included in fund
services business for the purposes of this Order.
(3) An
expression used in this Order, being an expression that is used in the Law and has
a meaning in the Law in relation to a collective investment fund, shall, unless
the contrary intention appears, have the same meaning in this Order in relation
to an unregulated fund.
(4) Nothing
in paragraph (3) affects the operation of Article 10 of the
Interpretation (Jersey) Law 1954[6].
2 Unregulated
fund as scheme that does not constitute fund: Article 3(7) of Law
(1) A
scheme or arrangement in relation to which the conditions set out in
Schedule 1 are satisfied is not to constitute a collective investment fund
for the purposes of the Law.
(2) A
scheme or arrangement in relation to which the conditions set out in
Schedule 2 are satisfied is not to constitute a collective investment fund
for the purposes of the Law.
(3) If
any of the conditions referred to in paragraph (1) or (2) (as the case
requires) is breached in relation to a fund, the fund does not for that reason
alone fail to be a scheme or arrangement that does not constitute a collective
investment fund for the purposes of the Law if –
(a) in
the case where the Commission has, by notice given to a fund company, specified
steps to be taken by the fund company, the fund company has taken those steps,
and has taken those steps within such period as the Commission has specified in
the notice or, if the Commission has not specified any period in the notice,
within 30 days after the notice has been given to the fund company; or
(b) in
any other case, a fund company has, within a reasonable time after the breach
of the condition occurs, taken reasonable steps to remedy the breach of the
condition.
(4) A
condition set out in Schedule 1 is not to be taken to have been breached
only by the acquisition of a unit in a fund by succession on the death or
bankruptcy of a person who had held the unit.
3 Notice
of unregulated fund
(1) When
a person gives written notice to the registrar under Schedule 1 or 2, the
registrar shall by written notice to the person acknowledge receipt of the
notice given by the person.
(2) The
registrar shall make available for inspection, on demand by any member of the
public, any written notice that is given to the registrar under Schedule 1
or 2.
4 Commencement
and citation
(1) This
Order may be cited as the Collective Investment Funds (Unregulated Funds)
(Jersey) Order 2008.
(2) This
Order shall come into force on 19th February 2008.
senator p.f.c. ozouf
Minister for Economic Development
SCHEDULE 1
(Article 2(1))
conditions for unregulated eligible
investor fund
1 Structure
of fund
(1) The
fund is –
(a) a
company incorporated under the Companies (Jersey) Law 1991;
(b) a
limited partnership (within the meaning of the Limited Partnerships (Jersey)
Law 1994) of which at least one general partner is a company incorporated under
the Companies (Jersey) Law 1991; or
(c) a
unit trust of which at least one of the trustees, or at least one of the managers,
is a company incorporated under the Companies (Jersey) Law 1991.
(2) The
name of the fund is not undesirable or misleading.
(3) No
units have been issued in the fund before this Order comes into force.
2 Functionaries
registered
(1) Each
functionary that –
(a) in
or from within Jersey, carries on fund services business of any class in
relation to the fund; and
(b) does
that from a place of business in Jersey,
is registered under the Financial Services (Jersey) Law 1998 to
carry on such fund services business (within the meaning of that Law) as
corresponds to fund services business of the class referred to in clause (a).
(2) Each
functionary that –
(a) carries
on fund services business of any class in any part of the world in relation to
the fund; and
(b) is
a company incorporated in Jersey,
is registered under the Financial Services (Jersey) Law 1998 to
carry on such fund services business (within the meaning of that Law) as
corresponds to fund services business of the class referred to in
clause (a).
(3) However,
in the case where the only fund services business carried on by a functionary
in relation to the fund is the provision by way of business of a registered
office, or a business address, for a fund company, then the functionary does
not satisfy sub-paragraph (1) or (2) unless the class of fund services
business in respect of which the functionary is registered under the Financial
Services (Jersey) Law 1998 is or includes that of manager, manager of a managed
entity, administrator, investment manager, investment adviser, trustee,
custodian or depositary, or member (except a limited partner) of a partnership,
including a partnership constituted under the law of a country or territory
outside Jersey.
3 Notice
of fund to registrar
(1) Written
notice of the establishment of the fund has been given to the registrar.
(2) The
notice –
(a) includes
a declaration that the conditions set out in this Schedule (other than
this paragraph) are satisfied in relation to the fund;
(b) is
in the form approved by the registrar; and
(c) is
executed in relation to the fund by a fund company or another person.
4 Subscriptions
to units
(1) This
paragraph applies in the case where units in the fund are available for subscription,
purchase, or exchange, otherwise than by trade on a stock exchange or stock market.
(2) The
units may be acquired by subscription, purchase, or exchange, only
if –
(a) the
acquisition is by an eligible investor;
(b) the
investor signs a declaration that he or she has received the warning set out in
Schedule 3 and understands and accepts its terms in relation to the
subscription, purchase or exchange; and
(c) the
declaration is given to a fund company before the subscription, purchase, or
exchange, is completed.
5 Exchange
trading of units
(1) This
paragraph applies in the case where units in the fund are traded on a stock exchange
or stock market.
(2) The
units may be acquired pursuant to that trade only if –
(a) no
market makers have been appointed by a fund company or by another person on
behalf of the fund;
(b) the
fund companies, so far as reasonably possible, restrict transfers of the units
in order to ensure that no person other than an eligible investor can acquire
units in the fund through that trade;
(c) a
person who acquires units in the fund on the stock exchange or stock market signs
a declaration that he or she has received the warning set out in Schedule 3
and understands and accepts its terms in relation to his or her acquisition of the
units;
(d) the
declaration is given to a fund company before the subscription, purchase, or
exchange, is completed; and
(e) the
stock exchange or stock market is conducted in such a way as not to prevent the
restriction referred to in clause (b) from operating.
(3) In
this paragraph –
“market maker” means a person who –
(a) holds
himself or herself out at all normal times in compliance with the rules of a
securities market as willing to acquire or dispose of securities; and
(b) is
recognized as doing so under those rules;
“securities” has the same meaning as in the Companies
(Jersey) Law 1991;
“securities market” means any securities market that is
established by or under, or is regulated by or under, a legislative instrument
made by the country or territory, or the part of a country or territory, that
hosts the securities market.
6 Who
is an eligible investor?
(1) For
the purposes of this Schedule, an eligible investor in relation to a fund is a
person who at the time of making in relation to the fund a subscription,
purchase, or exchange, referred to in paragraph 4 or an acquisition referred to
in paragraph 5 is a person specified in any of the clauses of
sub-paragraph (2).
(2) The
following persons are specified for the purposes of sub-paragraph (1) –
(a) a
person who has agreed to pay consideration of not less than one million United
States dollars, or the equivalent of that amount in another currency, for the subscription,
purchase, exchange or acquisition;
(b) a
person whose ordinary business or professional activity includes or could be
reasonably expected to include –
(i) the acquisition,
underwriting, management, holding or disposal of investments, whether as
principal or agent, or
(ii) the giving of
advice on investment;
(c) subject
to sub-paragraph (3), an employee, director or shareholder of, or
consultant to, a person specified in clause (b);
(d) a
functionary in relation to the fund or an associate of such a functionary;
(e) subject
to sub-paragraph (3), a person who –
(i) is an employee,
director or shareholder of, or consultant to, such a functionary or associate,
and
(ii) in making the
relevant subscription, purchase, exchange or acquisition would acquire units in
the fund as remuneration, or reward, as such an employee, director or
shareholder or consultant;
(f) an
individual whose property has a total market value of not less than 10 million
United States dollars or the equivalent of that amount in another currency;
(g) a company,
partnership, limited partnership or limited liability partnership, trust, or
unincorporated association, in relation to which one or both of the following
requirements is met –
(i) its property (or
its property and that of its associates) has a total market value of not less
than 10 million United States dollars or the equivalent of that amount in
another currency,
(ii) every shareholder
of the company, every partner of the partnership, limited partnership or
limited liability partnership, every beneficiary of the trust or every member
of the association (as the case requires) would, himself or herself, be an
eligible investor in relation to the fund if he or she made in relation to the
fund a subscription, purchase, or exchange, referred to in paragraph 4 or
an acquisition referred to in paragraph 5;
(h) a
wholly-owned subsidiary of a company that satisfies clause (g);
(i) a
trustee of a trust established by a person who is specified in any of clauses
(b), (c), (d), (f), (g) and (h) or is an employee, director, shareholder, or
consultant, specified in clause (e)(i);
(j) a
trustee of a trust established for the benefit of –
(i) a person who is
specified in clause (b) or (c) or is an employee, director, shareholder, or
consultant, specified in clause (e)(i),
(ii) any one or more
persons in any one or more of the following classes –
(A) the
spouse of a person specified in sub-clause (i),
(B) the
issue of such a person,
(C) the
dependants of such a person, or
(iii) a person specified in sub-clause (i)
and any one or more persons in any one or more of the following
classes –
(A) his or
her spouse,
(B) his
or her issue,
(C) his
or her dependants; or
(k) a
person who in making the subscription, purchase, exchange or acquisition is
acting as or for a public sector body.
(3) For
the purposes of –
(a) sub-paragraph (2)(c),
a reference to a shareholder of a person specified in sub-paragraph (2)(b)
is a reference to a shareholder in respect of whom the person has signed a
declaration that the investment is suitable for the shareholder and that the
shareholder is able to bear the economic consequences of the investment,
including the possibility of the loss of the entire investment; or
(b) sub-paragraph (2)(e),
a reference to a shareholder of a functionary or associate specified in sub-paragraph (2)(d)
is a reference to a shareholder in respect of whom the functionary or associate
(as the case requires) has signed a declaration that the investment is suitable
for the shareholder and that the shareholder is able to bear the economic
consequences of the investment, including the possibility of the loss of the
entire investment.
(4) To
calculate the total market value of an individual’s property for the
purposes of sub-paragraph (2)(f) –
(a) add
the market value of the movable and immovable property (in Jersey and
elsewhere) of the individual (determined as if there were no liability in
respect of any of that property) to the market value of the movable and
immovable property (in Jersey and elsewhere) of the individual’s spouse (determined
as if there were no liability in respect of any of that property);
(b) deduct
any liability that is secured over that property of the individual by mortgage,
charge or other security or encumbrance;
(c) deduct
any liability that is secured over that property of the individual’s
spouse by mortgage, charge or other security or encumbrance;
(d) deduct
any liability of the individual that is not secured as referred to in
clause (b); and
(e) deduct
any liability of the individual’s spouse that is not secured as referred
to in clause (c).
(5) However,
if the sum of the deductions that would be made under sub-paragraph (4)(c)
and (e) exceeds the total market value of the movable and immovable property
(in Jersey and elsewhere) of the spouse, then –
(a) treat
the latter total market value as zero; and
(b) do
not make the deductions referred to in sub-paragraph (4)(c) and (e).
(6) A
reference to property in sub-paragraph (4) or (5) shall not include the
individual’s principal residence, or the spouse’s principal
residence.
(7) For
the purposes of sub-paragraph (2)(g)(i), except in the case to which
sub-paragraph (8) applies, to calculate the total market value of the
property of a company, partnership, limited partnership or limited liability
partnership, trust, or unincorporated association –
(a) find
the total market value of its movable and immovable property (in Jersey and
elsewhere) as if there were no liability in respect of that property;
(b) deduct
any liability that is secured over that property by mortgage, charge or other
security or encumbrance; and
(c) deduct
any liability of the company, partnership, limited partnership or limited
liability partnership, trust, or unincorporated association, being a liability
that is not so secured.
(8) For
the purposes of sub-paragraph (2)(g)(i), in the case where the total market
value of the property of a company, partnership, limited partnership or limited
liability partnership, trust, or unincorporated association, and of its
associates, is to be calculated –
(a) find
the total market value of its and their movable and immovable property (in
Jersey and elsewhere) as if there were no liability in respect of that property;
(b) deduct
any liability that is secured over that property by mortgage, charge or other
security or encumbrance; and
(c) deduct
any liabilities of the company, partnership, limited partnership or limited
liability partnership, trust, or unincorporated association, and of its
associates, being liabilities that are not so secured.
(9) For
the purposes of this paragraph –
“associate” means –
(a) in
relation to a company –
(i) a company that is
a subsidiary or a holding body of the first-mentioned company or a subsidiary
of any such holding body,
(ii) an individual,
partnership, limited partnership or limited liability partnership, trust, or
unincorporated association that has direct or indirect control of the
first-mentioned company, or
(iii) a company that is
directly or indirectly controlled by any such individual, partnership, limited
partnership or limited liability partnership, trust, or unincorporated association;
or
(b) in
relation to an individual, partnership, limited partnership or limited
liability partnership, trust, or unincorporated association, a company directly
or indirectly controlled by the individual, partnership, limited partnership or
limited liability partnership, trust, or unincorporated association;
“holding body” has the same meaning as in the Companies
(Jersey) Law 1991;
“public sector body” means –
(a) the
States or the government of any country (or territory) outside Jersey;
(b) a
local government of any part of a country (or territory) outside Jersey;
(c) any
international organization the members of which include Jersey or a member
state of the European Economic Community; or
(d) the
central bank of any sovereign State, the European System of Central Banks or
any other system of central banks;
“subsidiary” has the same meaning as in the Companies
(Jersey) Law 1991;
“wholly-owned subsidiary” has the same meaning as in the
Companies (Jersey) Law 1991.
7 Investment
manager who invests in fund on behalf of non-eligible investors
(1) This
paragraph applies in the case where a person –
(a) applies
for the subscription, purchase, or exchange, of units in the fund as an
investment that is, directly or indirectly, for or on behalf of investors who are
not eligible investors; or
(b) acquires
units in the fund on a stock exchange or stock market as an investment that is,
directly or indirectly, for or on behalf of investors who are not eligible
investors.
(2) In that
case, a declaration referred to in paragraph 4(2)(b) in relation to the
subscription, purchase or exchange, or a declaration referred to in
paragraph 5(2)(c) in relation to the acquisition, being a declaration that
is signed by the person referred to in sub-paragraph (1), is not complete
unless it contains an additional declaration signed by the person that he or
she is satisfied –
(a) that
the investment is suitable for the investors referred to in sub-paragraph (1)(a)
or (b), as the case requires; and
(b) that
they are able to bear the economic consequences of the investment, including
the possibility of the loss of the entire investment.
8 Continued
observance of conditions
There are procedures in place to ensure that the conditions set out
in this Schedule (otherwise than in paragraph 3) continue to be satisfied
in relation to the fund.
SCHEDULE 2
(Article 2(2))
conditions for unregulated EXCHANGE-TRADED fund
1 Structure
of fund
(1) The
fund is –
(a) a
company incorporated under the Companies (Jersey) Law 1991;
(b) a limited
partnership (within the meaning of the Limited Partnerships (Jersey) Law 1994)
of which at least one general partner is a company incorporated under the
Companies (Jersey) Law 1991; or
(c) a
unit trust of which at least one of the trustees, or at least one of the
managers, is a company incorporated under the Companies (Jersey) Law 1991.
(2) The
fund is a closed fund.
(3) The
name of the fund is not undesirable or misleading.
(4) No
units have been issued in the fund before this Order comes into force.
2 Functionaries
registered
(1) Each
functionary that –
(a) in
or from within Jersey, carries on fund services business of any class in
relation to the fund; and
(b) does
that from a place of business in Jersey,
is registered under the Financial Services (Jersey) Law 1998 to
carry on such fund services business (within the meaning of that Law) as
corresponds to fund services business of the class referred to in
clause (a).
(2) Each
functionary that –
(a) carries
on fund services business of any class in any part of the world in relation to
the fund; and
(b) is
a company incorporated in Jersey,
is registered under the Financial Services (Jersey) Law 1998 to
carry on such fund services business (within the meaning of that Law) as
corresponds to fund services business of the class referred to in
clause (a).
(3) However,
in the case where the only fund services business carried on by a functionary
in relation to the fund is the provision by way of business of a registered
office, or a business address, for a fund company, then the functionary does
not satisfy sub-paragraph (1) or (2) unless the class of fund services
business in respect of which the functionary is registered under the Financial
Services (Jersey) Law 1998 is or includes that of manager, manager of a managed
entity, administrator, investment manager, investment adviser, trustee,
custodian or depositary, or member (except a limited partner) of a partnership,
including a partnership constituted under the law of a country or territory
outside Jersey.
3 Notice
of fund to registrar
(1) Written
notice of the establishment of the fund has been given to the registrar.
(2) The
notice –
(a) includes
a declaration that the conditions set out in this Schedule (other than this
paragraph) are satisfied in relation to the fund;
(b) is
in the form approved by the registrar; and
(c) is
executed in relation to the fund by a fund company or another person.
4 Exchange
listing
(1) Units
in the fund are listed only on one or more of the exchanges listed in Schedule 4.
(2) That
listing occurs no later than 90 days after notice of the establishment of
the fund is given to the registrar under paragraph 3, or such longer
period as is approved by the Commission.
5 Warning
on offer document
A prospectus relating to the fund contains a prominent warning in
the following words –
“This unregulated exchange-listed fund is not regulated in
Jersey. The Jersey Financial Services Commission has neither evaluated nor
approved –
(a) the
scheme or arrangement of the fund;
(b) the
parties involved in the promotion, management or administration of the fund; or
(c) this
prospectus.
The Jersey Financial Services Commission has no ongoing
responsibility to monitor the performance of the fund, to supervise the
management of the fund or to protect the interests of investors in the
fund.”.
6 Continued
observance of conditions
There are procedures in place to ensure that the conditions set out
in this Schedule (otherwise than in paragraph 3 or 4(2)) continue to be
satisfied in relation to the fund.
SCHEDULE 3
(Paragraph 4(2) and 5(2) of Schedule 1)
warning to eligible investor
This fund has been established in Jersey as an unregulated eligible
investor fund. It is only open to eligible investors (within the meaning of
Schedule 1 to the Collective Investment Funds (Unregulated Funds) (Jersey)
Order 2008).
This fund has not been approved or authorized by the Jersey
Financial Services Commission. The fund is not regulated by the Jersey
Financial Services Commission and is only suitable for professional or
experienced investors, or those who have taken appropriate professional advice.
Regulatory requirements, which may be seen as necessary for the protection of
retail or non-expert investors, do not apply to unregulated funds.
By declaring that you have received this warning and understood and
accepted its terms you are expressly agreeing that you are an eligible investor
within the meaning of Schedule 1 to the Collective Investment Funds
(Unregulated Funds) (Jersey) Order 2008. You are also expressly agreeing that
you accept the risks in the investment accordingly.
If you are an investment manager acquiring units in this fund as an
investment that is, directly or indirectly, for or on behalf of persons who are
not eligible investors (within the meaning of Schedule 1 to the Collective
Investment Funds (Unregulated Funds) (Jersey) Order 2008), by additionally
declaring that you are satisfied that the investment is suitable for those
investors and that they are able to bear the economic consequences of the
investment, including the possibility of the loss of the entire investment, you
are declaring that you have sufficient information in order to be satisfied as
to the truth of that statement.
You are wholly responsible for ensuring that all aspects of this
fund are acceptable to you (and to any persons referred to in the preceding
paragraph). Investment in an unregulated fund may involve special risks that
could lead to a loss of all or a substantial portion of that investment. Unless
you (and those persons, if any) fully understand and accept the nature of this
fund and the risks inherent in investing in this fund you should not invest in
this fund.
SCHEDULE 4
(Paragraph 4(1) of Schedule 2)
exchanges and markets
Australia: Australian Stock Exchange
Austria: Wiener Bourse
Belgium: Euronext
Bermuda: Bermuda Stock Exchange
Bulgaria: Bulgarian Stock Exchange
Canada:
Bourse de Montreal Inc
Toronto Stock Exchange
Channel Islands: Channel Islands Stock Exchange
China: Hong Kong Exchanges and Clearing Limited
Cyprus: Cyprus Stock Exchange
Czech Republic: Prague Stock Exchange
Denmark: Copenhagen Stock Exchange
Estonia: Tallinn Stock Exchange
Finland: Helsinki Stock Exchange
France: Euronext
Germany: Deutsche Bourse
Greece: Athens Stock Exchange
Hungary: Budapest Stock Exchange
Iceland: Iceland Stock Exchange
Ireland: Irish Stock Exchange
Italy: Borsa Italiana
Japan:
Osaka Securities
Exchange
Tokyo Stock Exchange
Latvia: Riga Stock Exchange
Lithuania: National Stock Exchange of Lithuania
Luxembourg: Bourse de Luxembourg
Malta: Malta Stock Exchange
Mexico: Bolsa Mexicana de Valores
Netherlands: Euronext
New Zealand: New Zealand Stock Exchange
Norway: Oslo Bors
Poland: Warsaw Stock Exchange
Portugal: Lisbon Stock Exchange
Romania: Bucharest Stock Exchange
Singapore: Singapore Exchange
Slovakia: Bratislava Stock Exchange
Slovenia: Ljubljana Stock Exchange, Inc
South Africa: Johannesburg Stock Exchange
South Korea: Korea Stock Exchange
Spain: Bolsas y Mercados Espanoles
Sweden: Stockholmborsen
Switzerland: Swiss Stock Exchange (“SWX”)
United Kingdom:
Alternative Investment
Market (“AIM”)
London Stock Exchange
United States of America:
American Stock Exchange
Chicago Stock Exchange
National Association of
Securities Dealers Automated Quotations (“NASDAQ”)
New York Stock Exchange
Pacific Exchange
Philadelphia Stock
Exchange