Guidance Note: for a Manager of a Managed Entity (a MoME) and certain managed entities

Summary

This is Jersey Financial Services Commission guidance explaining how the fund services business regime applies to a Manager of a Managed Entity (a MoME) and to managed entities that act as general partner or manager of Qualifying Funds. It clarifies what activities are treated as MoME services, the contractual and governance expectations around MoME arrangements, and how the Fund Services Business Code of Practice (FSB Code) applies differently to MoMEs versus certain managed entities.

• Scope of MoME activity: Provision of management services (directors, Compliance Officer, MLRO/MLCO, books and records, PII inclusion, procedures manual, company secretarial services, registered office) to enable a managed entity to comply with regulatory requirements is treated as MoME activity.
• MoMEs follow full FSB Code: A MoME must adhere to the FSB Code in full, including risk management oversight over the managed entities it services and safeguards around directors it provides.
• Certain managed entities may follow core principles only: Managed entities established for Qualifying Funds may be subject only to the eight core principles of the FSB Code rather than the full Code, unless they elect otherwise.
• Conditions on registration certificates: Where only core principles apply, conditions commonly attached to the managed entity's registration certificate require: JFSC consent before acting for new funds, appointment of a registered MoME, 28 days' prior notice of any change of MoME, compliance with JFSC notification/consent, advertising and record keeping requirements, appointment of a Compliance Officer/MLRO/MLCO (which a MoME can satisfy on its behalf), permitting JFSC inspections, and compliance with the AIF Code where relevant.
• Retained responsibility: A managed entity retains ultimate responsibility for its own regulatory compliance even where a MoME provides supporting services.
• Contractual and governance expectations: New MoME engagements should be governed by a formal agreement covering services, termination and record keeping; pre-2007 agreements should have been reviewed and updated; conflicts of interest arising from MoME/managed entity relationships should be documented and mitigated.

An appendix sets out non-binding indicative guidance on how a managed entity following only the core principles might demonstrate compliance with each FSB Code principle, including corporate governance, systems and controls, CPD, compliance function, financial resources and PII.

Key obligations

• A managed entity relying on core principles only must notify the JFSC of its intention to change its MoME at least 28 days prior to the change taking effect
• A managed entity relying on core principles only may not act for new or further funds without first obtaining the consent of a duly authorised officer of the JFSC
• A managed entity relying on core principles only must appoint a person registered to act as MoME
• A managed entity relying on core principles only must appoint a Compliance Officer, MLRO and MLCO (which may be satisfied via the MoME)
• A managed entity relying on core principles only must permit JFSC officers to conduct inspections and procure that any Jersey-based agent or subcontractor does the same
• MoMEs must comply with the FSB Code in full, including documenting risks arising from the managed entities they act for
• Managed entities must maintain a documented conflicts of interest policy addressing risks arising from the MoME relationship
• Managed entities must maintain financial resources and PII cover appropriate to their activities and document their assessment

Applies to

Manager of a Managed Entity (MoME), managed entities registered to conduct fund services business, managed entities acting for Qualifying Funds

Deadlines

• 28 days prior to the change taking effect: Notice to the JFSC required before changing the MoME appointed to a managed entity registered under the core-principles condition set