FSB Licensing of SLPs and ILPs with an LLP GP

Summary

This JFSC guidance note explains how the Commission applies its Fund Services Business (FSB) licensing policy to Separate Limited Partnerships (SLPs) and Incorporated Limited Partnerships (ILPs) whose sole general partner is a Jersey limited liability partnership (LLP). It is one of three related documents on LLP-involved fund structures and sets out both the licensing approach and the standard licence conditions that will attach to such entities once registered.

• Scope of licensing: FSB licences are currently only available to SLPs/ILPs with an LLP GP for the management/advisory classes of manager, general partner, investment manager and investment adviser, and only where the LLP GP is Jersey-law governed; foreign-law LLP GPs are not eligible at this time.
• Multiple GP structures discouraged: Structures with multiple GPs (one being an LLP) are discouraged and not covered by this guidance; such applications face a high bar and possible extra conditions.
• Span of control: Regulatory span of control must be satisfied by reference to the LLP's direction, applying the standard four-eyes/six-eyes approach, exclusively natural persons who are Managing Partners or directors of Managing Partners, with at least two Jersey-resident.
• Partner admission consent: No new partner may be admitted to the LLP without the JFSC's prior written consent, a condition to be attached to the licence.
• Designated Partner requirement: The LLP must have at least one Designated Partner domiciled or incorporated in Jersey.
• Corporate partner directors: Where a partner in the LLP is a company, its directors must be natural persons; a Managing Partner that is a company must be Jersey-incorporated with at least two Jersey-resident directors.
• Offering document disclosures: Fund offering documents must disclose the Registered Person's and LLP's status, establishment details and registered office, the JFSC disclaimer statements, and details of LLP partners and corporate partners' directors (subject to possible JFSC dispensation).
• Jurisdiction clause: Contracts under which the Registered Person provides FSB services may not exclude the jurisdiction of the Jersey Courts, absent JFSC consent.
• MoME arrangements: Where a Manager of a Managed Entity (MoME) is appointed, it must be appointed directly to the SLP/ILP (not merely to the LLP GP or its Managing Partners), and additional standard MoME conditions apply, including notifying the JFSC before acting for new funds and before changing MoME.
• No change to existing frameworks: Outsourcing/delegation policy, application forms, fee notices, the FSB Accounts Order, Appointment of Manager Order, AML-CFT provisions and the Principal Person definition remain unchanged.

The guidance also sets out standard licence conditions (Sections 2 to 4) that will be imposed on such Registered Persons, covering span of control, partner admission consent, Designated Partner status, disclosure obligations, jurisdiction clauses, and, where applicable, MoME/managed entity conditions such as compliance, MLRO/MLCO appointment, record-keeping, inspections and advertising standards. A note flags that the underlying 1997 LLP Law was replaced by the 2017 LLP Law and that this policy will need to be updated accordingly.

Key obligations

• Applicants must ensure that directors of any corporate partner in the LLP GP are natural persons.
• A Managing Partner that is a company must be incorporated in Jersey with at least two Jersey-resident directors.
• The LLP's span of control must consist exclusively of natural persons who are Managing Partners or directors of Managing Partners, with at least two Jersey-resident.
• No partner may be admitted to the LLP without the prior written consent of an officer of the JFSC.
• The LLP must maintain at least one Designated Partner domiciled or incorporated in Jersey, unless the JFSC's prior written consent to an exception is obtained.
• The FSB Application Form must be signed by two Jersey-resident persons forming part of the Applicant's regulatory span of control.
• The Registered Person must ensure fund offering documentation includes specified disclosures about its status, the LLP's status, JFSC disclaimer statements, and identity/jurisdiction details of LLP partners and corporate partners' directors.
• The Registered Person must notify the JFSC of any failure or anticipated failure to make the required offering document disclosures.
• Contracts for provision of FSB services to client funds must not exclude the jurisdiction of the Courts of Jersey, absent JFSC consent.
• Successful applicants must notify the JFSC on an ongoing basis of any material changes to information provided during licensing.
• If a Managed Entity subject only to Core Principles, the Registered Person may not act for new or further funds without first obtaining written consent of a JFSC officer.
• The Registered Person must appoint a Manager of a Managed Entity (MoME) directly to the SLP or ILP itself.
• The Registered Person must notify the JFSC at least 28 days prior to any change of its MoME.
• The Registered Person must permit JFSC inspections and procure that agents/subcontractors in Jersey also permit inspections and provide assistance.
• The Registered Person must appoint a compliance officer, a money laundering compliance officer and a money laundering reporting officer (which a MoME may satisfy on its behalf).
• The Registered Person must adhere to notification, consent, record-keeping and advertising requirements set out in the FSB Codes of Practice as updated from time to time.
• Where AIFSB applies, the Registered Person must comply with the applicable sections of the Codes of Practice for Alternative Investment Funds and AIF Services Business.

Applies to

Separate Limited Partnerships (SLPs) with an LLP general partner, Incorporated Limited Partnerships (ILPs) with an LLP general partner, Limited Liability Partnerships (LLPs) acting as general partner, Fund Services Business (FSB) licence applicants and Registered Persons, Managers, general partners, investment managers and investment advisers of funds, Managers of a Managed Entity (MoME)

Deadlines

• at least 28 days prior to the change taking effect: The Registered Person must notify the JFSC of its intention to change its MoME at least 28 days before the change takes effect.