Jersey Updates Private Placement Funds Regime
Tuesday, January 31, 2012

The introduction of a revised regulatory regime for 'Private Placement Funds' will enhance Jersey's position as a centre for international funds business, according to a leading funds lawyer at offshore law firm Mourant Ozannes.

Ben Robins, the head of funds practice at Mourant Ozannes Jersey said the new regime would give funds professionals and investors even more confidence in Jersey as a well-regulated specialist centre for alternative funds business.

The new regime will apply to closed-ended funds, offered to a select number of investors, known as Private Placement Funds, which are offered to fifty or fewer professional or sophisticated investors, or more commonly to large banks, mutual funds, insurance companies and pension funds. The regime is to be regulated under Jersey’s Control of Borrowing Order (COBO) regulatory framework. Robins said the improved regulation would be of particular appeal to promoters of real estate, private equity, mezzanine, infrastructure and clean technology funds.

Private Placement Funds may be domiciled in or outside of Jersey but to fall within the regime they must have a Jersey manager and a Jersey-regulated administrator responsible for assessing and certifying that the fund's promoter satisfies criteria contained in the JFSC's Private Placement Funds Guide. If the fund meets all the criteria, the JFSC will issue COBO consent to the fund within 72 hours.

“Against the backdrop of the EU's Alternative Investment Fund Managers Directive, Jersey should be able to offer structures (such as Private Placement Funds) marketable to EU professional investors through EU private placement regimes until at least 2018," said Robins. "Jersey Private Placement Funds will also be of appeal to promoters of alternative funds targeting professional and sophisticated investors outside the EU, including the US, Middle East and Asia.”

“In an era of global regulatory upheaval, this new regime will offer alternative fund promoters a stream-lined and cost-effective regulatory environment, with a welcome degree of certainty," Robins added.