Guernsey Green Fund Rules and Guidance, 2021 (consolidated text)

Summary

This is the consolidated Guernsey Green Fund Rules and Guidance, 2021, issued by the GFSC under the Protection of Investors (Bailiwick of Guernsey) Law, 2020. It replaces the 2018 Green Fund Rules and sets out the conditions a collective investment scheme must meet to use, and keep, the description Guernsey Green Fund, together with Commission guidance on demonstrating compliance.

• Who it applies to: Licensees, governing bodies (directors, general partners or trustees), designated administrators, managers and designated custodians of authorised or registered collective investment schemes seeking or holding the Guernsey Green Fund designation.
• Designation routes: A fund must declare compliance via Route 1 (independent third-party certification) or Route 2 (licensee self-declaration) as set out in Schedule 1.
• Investment criteria: At least 75% of the fund's assets by value must meet the notified green criteria in Schedule 2; the remaining 25% must not undermine the fund's environmental objective or fall within excluded investment types in Schedule 3.
• Application and disclosure package: Before designation, the licensee must submit notification forms, the final prospectus, notified green criteria, the relevant Route 1/2 declaration, confirmation on ESG Principles, the fee, and any other information requested by the Commission.
• Ongoing oversight: The designated administrator must monitor adherence to the green and investment criteria monthly (open-ended funds) or quarterly (closed-ended funds), and escalate contraventions through set notification and rectification steps.
• Removal of designation: If a fund remains non-compliant beyond three months, the designated administrator must file a Declaration of non-compliance, cease use of the designation and logo, notify investors, and publish the declaration on the fund's website; the Commission may also remove designation directly in specified circumstances.
• Prospectus and reporting: Prospectuses must disclose the designation, green criteria, methodology, route type, ESG intentions and conflicts of interest; administrators must report annually to investors and file green-criteria investment details with the Commission within six months of the fund's accounting year end.

The Rules commenced on 1 November 2021 and funds already designated under the 2018 Rules continue to be recognised. Shaded-box guidance in the document is explanatory only and does not itself form part of the binding Rules.

Key obligations

• Ensure the Guernsey Green Fund invests with the objective of spreading risk and mitigating environmental damage, with at least 75% of assets by value meeting the notified green criteria and the remaining 25% not undermining that objective or falling within Schedule 3 exclusions
• Submit to the Commission the notification forms, final prospectus, notified green criteria, Route 1 or Route 2 declaration, ESG Principles confirmation, requisite fee and any other required information before using the Guernsey Green Fund description
• Not describe or promote a scheme as a Guernsey Green Fund unless it has been designated as such by the Commission
• Monitor the fund against the notified green criteria and investment criteria at least monthly for open-ended schemes and at least quarterly for closed-ended schemes
• On identifying a contravention, immediately notify the designated custodian and take steps to rectify it; if unrectified within one month, notify the Commission with rectification proposals; if unrectified for more than two months, inform investors or notify the Commission that such communication has not occurred
• Obtain the Commission's written consent before any change to the licensee who submitted the Declaration under Schedule 1
• Where non-compliance with green or investment criteria continues for three months, file a Declaration of non-compliance with the Commission, instruct the scheme to cease using the designation and logo, notify investors, and publish the declaration prominently on the fund's website
• Include in the fund's prospectus disclosure of the designation, notified green criteria, methodology, Route 1/2 status, ESG Principles intentions and any material conflicts of interest
• Submit to the Commission, within six months of the fund's accounting year end, details of how the scheme invested within its green criteria (via Form 200 alongside Form 143)
• Report to investors annually on how the scheme meets the green criteria
• Give immediate written notification to the Commission of any material change to prospectus disclosures required under rule 2.8, and ensure investors are notified of such changes

Applies to

Guernsey Green Funds (authorised or registered collective investment schemes), licensees, designated administrators, managers, designated custodians, governing bodies of schemes (directors, general partners, trustees)

Deadlines

• 1 November 2021: Commencement date of the Guernsey Green Fund Rules, 2021
• monthly (open-ended schemes) / quarterly (closed-ended schemes): Minimum frequency for designated administrator to monitor the fund against notified green criteria and investment criteria
• within one month of identifying a contravention: Deadline for designated administrator to rectify the position before having to notify the Commission and provide rectification proposals
• more than two months from date contravention identified: Designated administrator must ensure all investors are informed or otherwise notify the Commission that such communication has not taken place
• three months from date contravention identified: If the fund continues not to meet notified green criteria or investment criteria, designated administrator must file a Declaration of non-compliance and remove the Guernsey Green Fund designation
• within six months of the fund's accounting year end: Designated administrator must submit to the Commission details of how the scheme invested within the green criteria (Form 200 with Form 143)
• first six months from date of designation, or until fully invested (whichever first): Period during which the standard contravention notification obligations under rule 2.6(1)(a) to (d) do not apply

Related documents

• This document is made under Protection of Investors (Bailiwick of Guernsey) Law, 2020