Explanatory Note regarding the surrender of the authorisation or registration of a collective investment scheme

Summary

This guidance from the Guernsey Financial Services Commission explains how the Commission approaches requests to surrender the authorisation or registration of a collective investment scheme (CIS) under Section 11 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020. It sets out the evidence and conditions the Commission expects before consenting to a surrender, and the factors it weighs when a scheme has not yet completed formal liquidation or wind down.

• Who may apply: Only the designated administrator or designated trustee/custodian of an authorised or registered CIS may serve notice of surrender, and the surrender is not effective without the Commission's prior written consent.
• Grounds for refusal: The Commission may refuse consent if scheme liabilities have not been discharged or transferred, or if surrender would not be in the interests of the public or the reputation of the Bailiwick as a finance centre.
• Completed liquidation: Where liquidation is complete, the request should include a copy of the liquidator's final statements evidencing all assets sold, liabilities settled, monies distributed, and no residual contingent assets or liabilities.
• Managed wind down: Where a scheme underwent a managed wind down instead of formal liquidation, the request should be accompanied by a declaration from the designated administrator confirming the same matters; the Commission may seek further supporting evidence.
• Companies structure factors: For company schemes, relevant factors include good regulatory standing, no overdue returns or fees, competent liquidators/wind down parties, the nature of investors, and written assumption of AML/CFT/CPF responsibility by an appropriate Prescribed Business or licensed entity if surrender occurs before liquidation is complete.
• Limited partnership factors: For limited partnership schemes, relevant factors include entry into formal dissolution or advanced managed wind down, good regulatory standing, confirmation that liabilities have been discharged where reasonably possible, and continuation or assumption of AML/CFT/CPF responsibility by a licensed general partner or another POI licensee.
• Pre completion dialogue: Where surrender is sought before liquidation or wind down is fully complete and AML/CFT/CPF responsibility is to be transferred, the relevant parties must first discuss with the Commission how those requirements will be formalised, typically via a voluntarily agreed condition or a conditional consent letter.
• Investor risk: If a surrender application would create undue risk to investors, the Commission is unlikely to consent before the liquidation process is completed.

The note does not create new legal obligations beyond the POI Law itself, but it clarifies the documentary evidence and AML/CFT/CPF assurances the Commission expects administrators, trustees, custodians and general partners to provide when seeking to surrender a scheme's authorisation or registration.

Key obligations

• The designated administrator or designated trustee/custodian must obtain the Commission's prior written consent before a surrender of authorisation or registration is effective
• Where liquidation is complete, the surrender request must include a copy of the liquidator's final statements evidencing full settlement of liabilities, sale of assets, and distribution to investors with no contingent items remaining
• Where a managed wind down (not formal liquidation) has occurred, the request must be accompanied by a declaration from the designated administrator confirming assets sold, liabilities settled, monies distributed, and no contingent assets or liabilities remain
• Before surrender is sought prior to completion of liquidation or wind down, parties must enter into dialogue with the Commission on how AML/CFT/CPF responsibilities will be formalised, and any consent may be made conditional on a named licensee adopting those responsibilities
• For limited partnership schemes, the designated administrator or general partner/licensed manager must provide confirmation that liabilities have been discharged where reasonably possible, with a reasonable explanation for any retained assets

Applies to

collective investment schemes, designated administrators, designated trustees/custodians, general partners of limited partnership schemes, Prescribed Businesses, POI Law licensees