Explanatory Note – Revision of the Private Investment Fund Rules (2025-05-19)

Summary

This explanatory note accompanies the Private Investment Fund Rules, 2025, issued by the GFSC under the Protection of Investors (Bailiwick of Guernsey) Law, 2020, replacing the 2021 PIF Rules. It summarises the streamlined framework for Private Investment Funds (PIFs) and confirms that existing registered PIFs become subject to the revised rules automatically, without any new obligations or need to repaper investor or service provider declarations.

Key changes

• Merged categories: Former Route 1 and Route 2 PIFs are merged into a single Qualifying PIF (QPIF) category, with a new licensee admitted investor category added to the Qualifying Private Investor (QPI) criteria.
• No investor caps: The upper limits on the number of investors a PIF may accept, and on the number to whom a QPIF may be offered, have been removed, though private offering restrictions and QPI eligibility rules still apply.
• Look through rule: QPI criteria apply to investors' ultimate economic interest, looking through intermediate vehicles, subject to a carve out for entities managed or advised by a qualifying party.
• Auditor optional: External audit is no longer mandatory, but if an auditor is appointed it must have a place of business in the Bailiwick, and audited financial statements must include the auditors' report.
• Risk declaration replaces disclosure statement: A formal risk disclosure statement is no longer required; instead the Designated Administrator must obtain a standard investor declaration confirming QPI status and risk understanding.

Retained requirements

• Designated Administrator: All PIFs must continue to appoint a licensed Designated Administrator; a Guernsey licensed fund administrator remains mandatory for all Guernsey funds.
• Governance: The board and management of a PIF must continue to act in accordance with the Rules and the fund's principal documents.
• Conflicts of interest: PIFs must continue to comply with the conflicts of interest rules.
• Family PIFs: Registration as a Family PIF (formerly Route 3) continues to be available.

The Commission notes it will continue to monitor investor numbers through onsite and post facto reviews to ensure PIFs are not marketed to retail investors, treating breaches as a supervisory concern.

Key obligations

• All PIFs must appoint a licensed Designated Administrator (Guernsey licensed fund administrator).
• PIF financial statements must continue to be submitted to the Commission on an annual basis, including the auditors' report where the statements are audited.
• Where an auditor is appointed to a PIF, that auditor must operate from a place of business in the Bailiwick.
• The Designated Administrator must obtain a standard declaration from each investor confirming their QPI status and understanding of risk, in place of the former risk disclosure statement.
• The board and management of a PIF must act in accordance with the PIF Rules and the fund's principal documents.
• PIFs must comply with the conflicts of interest rules.
• A QPIF may only be offered privately to Qualifying Private Investors and must not be offered to the general public.

Applies to

Private Investment Funds (PIFs), Qualifying PIFs (QPIFs), Family PIFs, Designated Administrators, PoI Law licensees (PIF Managers), Guernsey licensed fund administrators, Auditors of PIFs