Guidance Note: Applications/Notifications in respect of Manager-Led Product (November 2021)

Summary

This Guidance Note explains the Guernsey Financial Services Commission's Manager-Led Product regime, which lets AIFMs use a single manager-led structure to market Alternative Investment Funds (AIFs) into host countries under the National Private Placement Regime while structuring management companies and collective investment schemes under the Protection of Investors (Bailiwick of Guernsey) Law, 2020. It sets out how applicants and existing AIFMs should apply for, notify, and manage licences and registrations within this regime.

• Scope: Applies to managers that are AIFMs under the AIFMD Rules seeking to market open ended or closed ended AIFs, and to associated prospective licensees that are not the AIFM, such as general partners to limited partnerships.
• New AIFM applicants: Existing licensees wishing to become AIFMs under the Manager-Led Product regime must submit a completed Form GAIFMLP with detailed supporting documentation, and a Form RA/1 if a licence is required.
• Existing AIFMs: AIFMs already complying with the AIFMD Rules that wish to use the Manager-Led Product must assess changes to their business model, controls and procedures and notify the Commission of these well in advance of notifying any proposed licensee and fund; no Form GAIFMLP is needed in this case.
• Management company licensing: For management companies within an AIF structure (e.g. a general partner to a limited partnership), the AIFM must notify the Commission using Form MLP; the Commission will issue a section 4 POI Law licence within one business day of receipt.
• Fund registration: For proposed collective investment schemes/AIFs, the AIFM must submit a Form MLP; the Commission will register the scheme under section 8 of the POI Law within one business day of receipt.
• Derogations: AIFMs may request derogations from the AIFMD Rules, subject to host country acceptance and maintained reporting standards; such requests should be raised early and the AIFM must not represent itself as fully AIFMD Rules compliant if derogations are granted.
• Ongoing conduct rules: Designated administrators and trustees must continue to follow the Licensees (Conduct of Business) Rules 2021 for section 8 registered funds within the regime, with the AIFMD Rules taking precedence in case of conflict for AIFs.

The Commission signals it will scrutinise applications rigorously, places significant weight on AIFM warranties, and is wary of open ended or highly leveraged structures that raise liquidity or solvency concerns.

Key obligations

• Existing licensees wishing to become AIFMs under the Manager-Led Product regime must submit a completed Form GAIFMLP with detailed documentation to the Commission.
• Applicants requiring a licence must also submit a Form RA/1.
• Existing AIFMs using the Manager-Led Product must notify the Commission of changes to business model, controls and procedures well in advance of notifying any proposed licensee and fund.
• The AIFM must notify the Commission using Form MLP when establishing a management company (e.g. general partner) within an AIF structure requiring a section 4 POI Law licence.
• The AIFM must submit a Form MLP for registration of a proposed collective investment scheme/AIF under section 8 of the POI Law.
• Designated administrators and trustees must continue to follow the Licensees (Conduct of Business) Rules 2021 for funds registered under section 8 of the POI Law within the Manager-Led Product regime.
• An AIFM must not hold itself out as fully meeting the AIFMD Rules if derogations have been granted.
• AIFMs must consider and notify the Commission of the ongoing appropriateness of existing derogations and disclosures as additional Form MLP submissions are made.

Applies to

AIFMs, existing licensees applying to become AIFMs, designated administrators, trustees, management companies (e.g. general partners to limited partnerships), collective investment schemes/AIFs registered under section 8 of the POI Law

Deadlines

• within one business day of receipt: Commission's target timeframe to issue a section 4 POI Law licence to a management company after receiving Form MLP.
• within one business day of receipt: Commission's target timeframe to register a proposed collective investment scheme/AIF under section 8 of the POI Law after receiving Form MLP.