Consultation Paper on Ancillary Vehicles (April 2021)

Summary

This is a GFSC Consultation Paper (April 2021) that follows up on an earlier Discussion Paper and sets out draft Ancillary Vehicle Notification Rules and Guidance, 2021. It proposes a notification based licensing exemption for certain fund related entities once the new 2020 Fiduciaries Law and 2020 Protection of Investors (PoI) Law come into force, replacing the current practice of seeking discretionary exemptions (DEs) from the Commission.

• Who is covered: General partners (and their directors) of carried interest limited partnerships and co-investment limited partnerships linked to an authorised or registered Guernsey fund, and single investor vehicles (SIVs), where administered by a licensed fiduciary.
• What changes: Instead of applying for a discretionary exemption, eligible ancillary vehicle activity would become statutorily exempt from licensing under the Fiduciaries Law once notified to the Commission under rules made pursuant to section 20 of the 2020 PoI Law.
• Notification content: Notifications must identify the ancillary vehicle and its registration number, the notifiable activity, the persons carrying it out, the administering fiduciary, the related fund (or SIV details), a structure chart, and any other activities carried out by the entity.
• Fee: Notifications must be accompanied by a fee, to be set out in future Fee Regulations (expected as part of a 2022 Fee Regulations consultation).
• Ongoing changes: Any change to the information supplied, or a notifiable activity ceasing to qualify for exemption, must be notified to the Commission as soon as reasonably practicable and at the latest within fourteen days.
• Existing discretionary exemptions: Entities already holding a DE are not required to switch to notification, but the Commission encourages surrender of the DE and a new notification whenever there is a touch point with the Commission (e.g. a new co-investment vehicle being established in the same fund structure).

The paper remains in draft/consultation form: the final Ancillary Vehicle Notification Rules will only take effect once the 2020 PoI Law and 2020 Fiduciaries Law themselves come into force. The Commission is inviting comments (questions Q1 to Q8) on the scope of eligible vehicles, the definitions used, the notification content, timing rules, and the draft Rules generally before finalising the regime.

Key obligations

• Once the notification regime is in force, the administrator of an ancillary vehicle (a licensed fiduciary) must submit a notification to the Commission covering the vehicle's name and registration number, the notifiable activity, persons carrying it out, the related fund or SIV details, a structure chart, and any other activities, in order for the licensing exemption to apply.
• Notifications must be accompanied by the relevant fee once fee regulations are made.
• The person making the notification must ensure the information supplied is complete and accurate to the best of their knowledge.
• The Commission must be notified of any change to the information supplied, or of a notifiable activity ceasing to qualify for exemption, as soon as reasonably practicable and at the latest within fourteen days.
• If a notification does not meet the requirements of the Ancillary Vehicle Rules, it is invalid and the person carrying out the activity may become subject to licensing under the 2020 Fiduciaries Law.

Applies to

licensed fiduciaries, administration businesses, general partners of carried interest vehicles, general partners of co-investment vehicles, single investor vehicles (SIVs), authorised funds, registered funds

Deadlines

• within fourteen days: Notification to the Commission of any change to information previously supplied, or of a notifiable activity ceasing to qualify for the exemption, once the draft Ancillary Vehicle Notification Rules take effect.