Discussion Paper - Funds Growth Omnibus (July 2020)

Summary

This is a Guernsey Financial Services Commission discussion paper seeking industry feedback on potential changes to the funds regulatory framework under the Protection of Investors (Bailiwick of Guernsey) Law, 1987. It does not itself change any rules; it sets out options the Commission may later develop into a formal Consultation Paper. Responses were sought by 2 September 2020.

• Private Investment Fund (PIF) manager requirement: Explores whether the requirement for a PoI-licensed fund manager to make investor-suitability declarations could be replaced or supplemented by declarations from PIF directors, an associated licensed fiduciary, or a defined 'qualifying private investor' category, while retaining the administrator's due diligence role.
• PIF declaration record-keeping: Proposes an explicit requirement for the party making an investor-loss-bearing declaration to retain evidence of its assessment and provide it to the Commission on request.
• PIF promoter due diligence guidance: Proposes additional Commission guidance clarifying administrators' due diligence expectations for new PIF promoters, without changing the streamlined application process.
• PIF sub-funds, classes and cells: Proposes standardising the declaration form and process required when new share classes, sub-funds or cells are added to an existing registered PIF.
• General partner licensing exemption: Proposes a new exempt person category under section 29 of the PoI Law for general partners of limited partnership funds where a commonly-owned, PoI-licensed Management Company performs the managerial function.
• Non-Guernsey Scheme (NGS) approvals: Proposes removing the requirement for prior Commission approval before PoI licensees commence restricted activities (management, administration, custody) in respect of an open-ended Non-Guernsey Scheme, while retaining a notification requirement and removing duplication with the Conduct of Business Rules.
• Guernsey Green Fund (GGF) criteria: Proposes considering the EU Sustainable Finance Taxonomy for adoption as an additional endorsed green criteria standard under the GGF Rules, likely during 2021; GGF designation remains optional for fund sponsors.
• New 'Green Verifier' restricted activity: Seeks views on creating a new PoI Law restricted activity for verification of Green Transactions, requiring licensees to have a Chief Scientific Officer and meet standard licensing criteria, covering GGFs and other green financial instruments.

Sixteen specific consultation questions are posed throughout the paper. No rule changes are made by this document itself; any changes would follow via a subsequent Consultation Paper, Commission guidance amendments, or States of Deliberation Ordinance as applicable.

Applies to

Private Investment Funds (PIFs), PoI Law-licensed fund managers, fund administrators, general partners of limited partnership funds, PoI licensees carrying out restricted activities in relation to Non-Guernsey Schemes, Guernsey Green Fund sponsors and managers, prospective Green Verifier licensees

Deadlines

• 2 September 2020: Deadline for interested parties to submit responses/feedback on this Discussion Paper to the Commission.