The European Securities and Markets Authority (ESMA) has approved a cooperation agreement with Jersey to ensure it can continue to deliver alternative investment funds business into Europe after the introduction of the EU Alternative Investment Fund Managers Directive (AIFMD) in July.
ESMA’s Board of Supervisors approved the Memorandum of Understanding (MoU) at its 22 May meeting. ESMA negotiated the agreement on behalf of all 27 EU Member State securities regulators as well as the authorities from Croatia, Iceland, Liechtenstein and Norway. The agreement, which will be signed by John Harris, Director General of the Jersey Financial Services Commission, enables alternative investment fund managers using Jersey to continue to seamlessly market into Europe through private placement rules until at least 2018.
In April this year, specific regulations mirroring AIFMD criteria were introduced in Jersey to ensure it would comply where relevant with all criteria set out in the AIFMD. The regulations also pave the way for the creation of a European-wide passport regime for alternative investment funds in anticipation of July 2015 when European-wide marketing passports will potentially become available to non-EU Alternative Investment Fund Managers.
Mike Jones, Deputy Director of Securities, Jersey Financial Services Commission, said:
“It has always been Jersey’s intention to be in the first tranche of jurisdictions to sign this AIFMD cooperation agreement and I am delighted that, following months of preparation work and constructive engagement with ESMA and the regulators of individual EU Member States, that agreement is now in place. It puts Jersey in a very strong position and ahead of schedule in terms of the AIFMD introduction date on 22 July.”
As a non EU jurisdiction, alongside an AIFMD-compliant regime, Jersey will also continue to offer fund managers a separate regime that lies outside the scope of the AIFMD for managers wishing to market to the rest of the world.
Geoff Cook, CEO, Jersey Finance, added:
“This is a major step in ensuring that Jersey can continue to facilitate alternative investment funds business within Europe, and will give alternative investment fund managers a huge amount of confidence in using Jersey. While Jersey’s approach to the Directive will offer a seamless transition when it comes into force in July, it will also offer a welcome degree of flexibility in offering a completely separate regime for fund managers wishing to market to non-EEA countries. This is not something all international finance centres, nor any EU nations, can offer, so in this sense the Directive will actually enhance Jersey’s appeal as a specialist centre for alternative funds business.”
Nigel Strachan, Chairman of the Jersey Funds Association, commented:
“With the alternative asset classes, including hedge, private equity and real estate, accounting for almost three quarters of funds business done in Jersey, this is an extremely welcome move that secures Jersey’s position as a leading funds centre both in a European and a wider global context. Jersey has positioned itself well ahead of the game and is in a strong position to support managers and service providers ahead of the July introduction date. This also reflects once again Jersey’s commitment to complying with international standards.”