Jersey embraces flexibility in order to evolve with international funds landscape

Jersey will be well positioned to grow its alternative funds business when the Alternative Investment Fund Managers Directive comes into place, according to expert speakers at a conference organised by Jersey Finance in London last week.

An audience of almost 300 fund professionals at Jersey Finance’s London Funds Conference, held at the British Museum last week (18 April), heard that Jersey is in a good position not only to meet stringent international regulations but also to grow its funds business.

The conference featured a heavyweight line-up of finance and legal professionals, with keynote presentations by David Smith, Economics Editor at The Sunday Times, and Jersey’s Treasury and Resources Minister Senator Philip Ozouf. Two panel sessions explored the key issues and opportunities facing the industry, including the Alternative Investment Fund Managers Directive (AIFMD).

Panellists explained that, whilst there is still some clarity required around the AIFMD, Jersey is moving forwards with implementing a new regime that would allow regulated fund businesses and funds in Jersey wishing to avail themselves of AIFMD ‘passport’ provisions. Delegates were told that Jersey will adopt new regimes to provide for new categories of funds, bringing them into line with distinct ‘AIFMD Codes of Practice’, and also continue to offer fund promoters an option to remain outside of Europe and the scope of the Directive.

The Directive’s banning of ‘letterbox arrangements’ was also discussed by panellists, whereby fund managers are prevented from delegating large portions of their duties to entities in other jurisdictions. Whilst it was agreed that this may have some implications for the structuring of offshore funds, it was stressed that the Jersey model will be far removed from any kind of such arrangement, giving promoters, managers and investors added confidence in Jersey.

Geoff Cook, chief executive, Jersey Finance Limited, commented:

“The clear message to come out of this conference was that Jersey is taking compliance with the AIFMD very seriously indeed. We want to be at the front of the queue when it comes to signing the agreements required to comply with the Directive, something that should send out the strong message that Jersey is keen to embrace new regulatory benchmarks. With the moves Jersey is making, it will be ideally positioned to provide certainty in relation to continued access to EU institutional capital from 2013 under the private placement regime, and from 2015 under the passport regime.

“Ideally we would like to see the AIFMD developing to enable Jersey, as a seasoned non-EU alternative fund domicile, the potential to offer an attractive platform for fund managers and promoters around the world to launch products under the AIFMD brand.

“At the same time, whilst Europe is vitally important to Jersey, our expanded product range will also offer an appropriate route to market to all industry participants whether located in Europe, Asia or Latin America.  In this way, Jersey will be able to offer the flexibility demanded by fund promoters seeking a global outreach, which is a fantastic position for a reputable jurisdiction to be in, and excellent news for the UK, investors and managers.”