03 Aug Guernsey fund refresher – 2021
Guernsey Fund Refresher – 2021
Following the introduction of an additional two Private Investment Fund (PIF) routes in guernsey, it is a good time to recap Guernsey fund structures and their key similarities and differences.
The degree of regulation required for a fund is primarily driven by the promotional strategy intended to target investors, leading to the requirement for investor protection. The additional routes to the PIF regime in Guernsey is evidence of the strong working relationship between the fund sector and its regulators and showcases a flexible and agile product suitable for many structures.
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The dark section above shows similarities across fund products.
Registered vs authorised – in registered collective investments schemes it is the responsibility of the designated manager (administrator) to provide warranties to the GFSC that appropriate due diligence has taken place. On the other hand, authorised collective investment schemes are subject to a three-stage application process with the GFSC in which this due diligence takes place.
Authorised fund classes:
Class A – open-ended schemes compliant with the GFSCs Collective Investment Scheme Rules and thus suitable for sale to the public in the United Kingdom.
Class B – the GFSC devised this route to provide some flexibility by allowing the GFSC to exhibit some judgment or discretion. This is because some schemes range from the retail funds aimed at the general public via institutional funds to the strictly private fund established solely as a vehicle for investment by a single institution, and that their investment objectives and risk profiles are similarly wide-ranging. Accordingly, the rules do not incorporate specific investment, borrowing and hedging restrictions. This also allows for the possibility of new products without the need to amend the Commission’s regulation. Class B schemes are typically aimed at institutional investors.
Class Q – this scheme is designed to be specific and is aimed at professional investor funds encouraging innovation. As such, compliance with this scheme places more focus on disclosure of risks inherent in the vehicle vs other classes.
Please get in touch with a member of the Obsidian team for further information.