Guidance on Registered Collective Investment Schemes (November 2021)

Summary

This guidance from the Guernsey Financial Services Commission sets out how Registered Collective Investment Schemes are assessed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020, and what due diligence Guernsey licensed service providers must carry out on a scheme's promoter and/or investment manager before and after registration. It also lists the documents, declarations and fees needed to support a registration application.

• Fit and proper assessment: Guernsey licensed service providers must assess the promoter and/or investment manager (and their controllers, directors and senior managers) for integrity, solvency and competence, and document their findings and conclusions.
• Ongoing monitoring: Due diligence on the promoter/investment manager and associated parties must be kept up to date on a regular, though unprescribed, basis.
• Consultation with the Commission: Applicants and licensees must consult Commission staff as soon as they become aware of uncertain or potentially material issues concerning a promoter, investment manager or associated party.
• Application requirements: Registration requires a signed Form REG 2019 from the proposed designated administrator, completed Forms PQ for controllers and directors, payment of the application fee, and certified final copies of the prospectus/offering document, application form or subscription agreement, constitutive documents, and material agreements.
• Warranties and prospectus disclosures: The designated administrator must certify that due diligence has been performed and that the prospectus contains the specified disclosures, including that the Commission has not reviewed the document and takes no responsibility for the scheme's financial soundness.
• Consequences of defective warranties: If the Commission finds warranties defective or misleading, it may take action against the licensee, including exclusion from the self-certification programme.
• Related licensing: Any Guernsey entity established by the promoter to conduct controlled investment business in connection with the scheme must itself be licensed under the POI Law before the scheme can be registered.

The Commission aims to grant registration within three working days of receiving a complete application, though related licensing of a Guernsey entity will normally take longer.

Key obligations

• Guernsey licensed service providers must perform and document sufficient due diligence to be satisfied that the promoter and/or investment manager are fit and proper before applying for registration
• Licensees must keep due diligence on the promoter/investment manager and associated parties updated on a regular basis after registration
• Applicants and licensees must consult Commission staff at the time they become aware of any issue whose materiality or impact on the scheme is uncertain
• The proposed designated administrator must sign Form REG 2019 containing specified declarations regarding due diligence and prospectus disclosures
• A fully completed Form PQ must be submitted for controllers and directors of the promoter and scheme
• The application fee required under the relevant fee regulations must be paid
• Certified complete final copies of the prospectus, application form/subscription agreement, constitutive documents, and all material agreements must be submitted
• Any Guernsey entity carrying on controlled investment business in connection with the scheme must obtain a POI Law licence before scheme registration can be issued
• Applicants must retain documentary evidence supporting warranties given and be able to produce it immediately upon Commission request

Applies to

Registered Collective Investment Schemes, Guernsey licensed service providers, designated administrators, promoters, investment managers

Deadlines

• within three working days: The Commission will declare the necessary registration under the POI Law within three working days of receipt/resolution of all required application items
• at least 24 months: A newly or recently established promoter/investment manager unable to produce audited annual financial statements for at least 24 months must instead have financial projections considered by the service provider
• past 5 years: Good standing assessment considers whether the institution, directors, controllers or senior managers have been subject to material disciplinary action or fraud/dishonesty convictions in the past 5 years