mutual funds

Who is caught

The Protection of Investors (Bailiwick of Guernsey) Law, 2020 is the core primary legislation for investment business and collective investment schemes in the Bailiwick. It prohibits carrying on controlled investment business without a Commission licence and restricts activities in connection with collective investment schemes unless the scheme is authorised or registered by the Guernsey Financial Services Commission. The rules and guidance indexed here sit beneath that Law and address particular scheme classes and service-provider roles.

• Scheme classes: Authorised schemes (including Class A, Class B and Class Q Qualifying Professional Investor Funds) and registered schemes, both open-ended and closed-ended, including each constituent part of an umbrella, cell or sub-fund structure.
• Fund regimes: Qualifying Investor Funds, Registered Collective Investment Schemes, Private Investment Funds (QPIFs and Family PIFs), and hedge funds and funds of hedge funds authorised under the Class B and Class Q rules.
• Service providers: Managers, designated administrators, designated custodians and designated trustees, directors of scheme companies, general partners of limited partnership schemes, corporate trustees, investment advisers and auditors.
• Licensees and applicants: Persons carrying on, or holding out as carrying on, controlled investment business in or from the Bailiwick, applicants for a licence, and holders of supervised (vetted or approved) roles.
• AIFM structures: AIFMs using the Manager-Led Product regime, and Guernsey-licensed custodians providing Article 36 AIFMD depositary services to non-EEA AIFs with an EEA AIFM.
• Promoters of overseas schemes: Persons promoting schemes authorised in designated countries, and Guernsey licensees carrying on restricted activities in connection with such schemes.

Sources: Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Investor Protection (Designated Countries and Territories) (Republic of Ireland) Regulations, 1992 · Investor Protection (Designated Countries and Territories) Regulations, 1989 · Authorised Collective Investment Schemes (Class B) (Amendment) Rules, 2024 · Collective Investment Schemes (Qualifying Professional Investor Funds)(Class Q) Rules and Guidance, 2021 · Private Investment Fund Rules and Guidance, 2025 · Registered Collective Investment Scheme Rules and Guidance, 2021 · Guidance Note: Applications/Notifications in respect of Manager-Led Product (November 2021) · Article 36 of AIFMD - Depositary Requirements Guidance Notes (November 2021) · Qualifying Investor Funds (QIF) Guidance Note

Key duties

The central obligations are to obtain licensing, authorisation or registration and then to meet continuing filing, notification and governance duties. Several filings carry fixed deadlines.

Authorisation and licensing

• Licence or authorisation: Controlled investment business requires a Commission licence, and restricted activities in connection with a scheme require the scheme to be authorised or registered by the Commission.
• Application information: Applicants must supply the required information, particulars, fee and supporting documents, and comply with further information requests.
• Material changes: Where facts, circumstances or previously supplied information change after a licence application, the applicant must inform the Commission as soon as practicable and in any event within 14 days (or such other period as the Commission determines).

Periodic filings

• Annual returns: Licensees and authorised or registered schemes must file annual returns with the Commission.
• Annual accounts: For registered schemes and PIFs, the designated administrator must submit annual audited or unaudited accounts no later than six months after the end of the annual accounting period; Class Q schemes must prepare and publish annual reports and financial statements.
• Quarterly return (Form 141): Designated administrators must file the Investment Designated Administrator Quarterly Return for each scheme, received by the Commission no later than the last day of the month following the calendar quarter-end, from the quarter-end after authorisation or registration and for the life of the scheme, plus a quarterly statistical return.
• Financial crime return (Form 152): Designated administrators must submit the Investment Vehicles Return within four months of the 1 July to 30 June reporting period, that is by 31 October each year.

Governance and structure

• Administrator and custodian: Every scheme must have a designated administrator; open-ended schemes must also have an independent, separately licensed, Bailiwick-based designated custodian or trustee with no shared officers or subsidiary relationship to the manager.
• Audit: Registered schemes and Class Q schemes must appoint a qualified auditor; a PIF need not appoint an auditor, but any auditor appointed must operate from a place of business in the Bailiwick.
• Conflicts of interest: Directors, general partners and trustees must ensure dealings between the scheme and relevant persons are on arm's length terms.
• Investor eligibility: Class Q managers must take reasonable steps to ensure units are held only by qualifying professional investors; QIF operators must restrict access to Qualified Investors; PIFs must not be offered to the general public and QPIF investors must give a written acknowledgement retained by the designated administrator.

Notifications

• Change of designated person: A change of designated administrator or designated custodian/trustee must not take effect until the Commission has formally confirmed the new designation; the specified party must notify the Commission with the required supporting information and warranties.
• Structural events: The designated administrator must give immediate written notice of any reconstruction, amalgamation, premature termination, winding up or extension of the scheme's life, and of additions of classes, sub-funds or cells.
• Prospectus and information particulars: Information particulars must meet the Prospectus Rules, 2025, be reviewed at least every twelve months for open schemes accepting subscriptions, and not be false or misleading; changes to prospectus content (including valuation, fees, issue/redemption and manager/adviser details for registered schemes) must be notified to investors and the Commission.
• Pricing errors: For open-ended schemes, incorrect pricing of 0.1% or more must be recorded and reported to the trustee, and the trustee must report pricing errors of 0.5% or more to the Commission, with compensation normally required at that level.

Sources: Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Authorised Collective Investment Schemes (Class B) (Amendment) Rules, 2024 · Collective Investment Schemes (Qualifying Professional Investor Funds)(Class Q) Rules and Guidance, 2021 · Private Investment Fund Rules and Guidance, 2025 · The Prospectus Rules and Guidance, 2025 · Registered Collective Investment Scheme (Amendment) Rules, 2025 · Registered Collective Investment Scheme Rules and Guidance, 2021 · Change of Designated Person Guidance (November 2021) · Explanatory notes for completion of Form 141a and b · Explanatory Note regarding the surrender of the authorisation or registration of a collective investment scheme · Pricing Controls in respect of Open-Ended Collective Investment Schemes (November 2021) · Financial Crime Risk – Investment Vehicles Return (Form 152) – Guidance for Completion · Prospectus Rules 2025 - Feedback Statement

Exemptions and carve-outs

The instruments provide exemptions from licensing and scheme-authorisation requirements, class-specific carve-outs, and a broad Commission discretion to exclude or modify rules.

Designated country promotion

• Recognised jurisdictions: Schemes authorised in the United Kingdom, Jersey, the Isle of Man and the Republic of Ireland are designated as affording adequate investor protection, so a person without a permanent place of business in the Bailiwick who is permitted to promote such a scheme in that jurisdiction may promote it in the Bailiwick without a Guernsey licence.
• Notice and fee: Reliance on this exemption requires a notice to the Commission identifying the country, naming each scheme, stating the manner of promotion and certifying permission, together with a fee of GBP 500 per scheme (nil where the designated country is Jersey).

Class and regime carve-outs

• Exempt persons: The POI Law allows certain persons or classes of person to be exempted from the licensing requirement, subject to conditions the Commission may impose.
• Private Investment Funds: PIFs need not appoint an auditor or produce information particulars, are excluded from the Prospectus Rules, and fall outside the Unclaimed Investor Money guidance.
• Class B amendment: The 2024 Class B amendments (removing unclaimed-proceeds and related disclosure provisions) do not apply to Class B schemes authorised before 20 December 2024, which continue under the prior rules.
• Prospectus exclusions: The Prospectus Rules, 2025 do not apply to, among others, listed or exchange-traded offers on IOSCO-member exchanges, PIFs, Takeover Code transactions, court-sanctioned schemes, employee share offers, promotions solely to Professional Investors or to no more than 200 identified persons, offers with a minimum consideration of at least GBP 100,000, and EU qualified-investor promotions; LSE-listed registered schemes are relieved only from the Part 2 disclosure requirements.
• Custody flexibility: Under the Hedge Fund Flexible Approach policy the Commission may waive the locally licensed custodian requirement and certain client money rules for eligible hedge funds, subject to disclosure and robustness conditions.

Connected directorships

• CIS-connected directors: Under amendments to the Fiduciaries Law made in 2023, an individual director of a company connected to an authorised or registered scheme may be exempt from fiduciary licensing where the company is administered by the same designated administrator as the scheme and is subject to that administrator's AML/CFT supervision, and the individual also acts as director of the scheme or its general partner.
• Commission discretion: The Commission may exclude or modify the application of the scheme and prospectus rules for a specific scheme by written notice.

Sources: Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Investor Protection (Designated Countries and Territories) (Republic of Ireland) Regulations, 1992 · Investor Protection (Designated Countries and Territories) Regulations, 1989 · Authorised Collective Investment Schemes (Class B) (Amendment) Rules, 2024 · Collective Investment Schemes (Qualifying Professional Investor Funds)(Class Q) Rules and Guidance, 2021 · Private Investment Fund Rules and Guidance, 2025 · The Prospectus Rules and Guidance, 2025 · Registered Collective Investment Scheme Rules and Guidance, 2021 · Guidance Note: Unclaimed Investor Money under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Hedge Fund Flexible Approach to Authorisation Policy · Prospectus Rules 2025 - Feedback Statement · Exemption of Directorships Connected to Authorised and Registered Collective Investment Schemes (December 2022)

Enforcement and penalties

Enforcement rests principally on the POI Law's offence provisions and the Commission's supervisory powers; the indexed instruments give limited detail on specific penalty amounts.

• Criminal offences: The POI Law creates criminal offences for carrying on controlled investment business without a licence or in breach of the Law, with associated penalties, director liability provisions and a due diligence defence.
• Supervisory and enforcement powers: The Commission may require information and documents, appoint skilled persons, give binding directions, and exercise representation, appeal and enforcement mechanisms; refusal or revocation of a licence may follow a failure to notify material changes.
• Return-related penalties: The Investment Vehicles Return (Form 152) is within scope of penalties for late and inaccurate submissions, and the Form 141 guidance reminds licensees of the Commission's powers under section 33 of the POI Law and section 109 of the Financial Services Business (Enforcement Powers) (Bailiwick of Guernsey) Law, 2020.
• Self-certification consequences: For QIFs and registered schemes, defective or misleading warranties or declarations can lead to enforcement action against the licensee, including exclusion from the relevant self-certification or fast-track programme.
• Investor compensation (Class A): For Class A authorised schemes, the Compensation of Investors Rules require participant contributions to a compensation fund and pay investors on a participant's default, generally capped at 90% of the liability with defined monetary limits and a per-year aggregate cap, with the Commission having subrogation and recovery rights; late participant contributions attract interest at 2% above LIBOR.

Beyond these provisions, the instruments indexed here do not set out a general schedule of fine amounts for scheme-level rule breaches.

Sources: Protection of Investors (Bailiwick of Guernsey) Law, 2020 · Collective Investment Schemes (Compensation of Investors) Rules 1988 (as amended) · Explanatory notes for completion of Form 141a and b · Guidance on Registered Collective Investment Schemes (November 2021) · Qualifying Investor Funds (QIF) Guidance Note · Financial Crime Risk – Investment Vehicles Return (Form 152) – Guidance for Completion