Collective Investment Funds (Recognized Funds) (Permit Conditions for Functionaries) (Jersey) Order 1988

Summary

This 1988 Jersey Order sets out the detailed permit conditions that apply to functionaries of recognized collective investment funds under the Collective Investment Funds (Jersey) Law 1988. It governs how managers, trustees, custodians and operators of recognized unit trusts and recognized open-ended investment companies (referred to as relevant holders) must notify the Commission of changes, conduct business, handle client relationships, advertise, keep records, manage financial resources, prepare financial statements, appoint auditors and hold client money.

• Notification: Relevant holders must notify the Commission of changes in name, address, controllers, directors, officers, subsidiaries, holding companies and major shareholdings, and must meet annual reporting requirements including staff numbers and value of recognized funds under management.
• Conduct and customer protection: The Order bans volume overriders, benefits in kind and reciprocal arrangements, prohibits product bias and excessive charging or churning, and requires suitability assessments, know your customer checks, best execution and disclosure to customers.
• Advertisements and contract notes: Detailed rules govern the content, approval, prominence of required statements, and fairness of advertisements for recognized funds, plus the required content of contract notes for unit transactions.
• Dealings, compliance and records: Operators must control dealings by officers and employees, maintain compliance procedures and compliance review, and keep prescribed records covering transactions, unit creation/cancellation, complaints, disciplinary action and registers of associates and connected customers.
• Financial resources and statements: Trustees, custodians and managers must meet specified financial resources requirements and must prepare and submit annual, quarterly and monthly financial statements in prescribed form, with notification obligations if financial resources requirements are breached.
• Auditors and client money: Relevant holders must appoint qualified auditors on defined terms, and client money must be held on trust in designated client bank accounts with prescribed payment, withdrawal and reconciliation controls.

The Order is highly technical and includes extensive schedules defining gross and liquid capital, investment position risk requirements, and the form and content of financial statements and client money trust declarations. It has been amended several times since 1988, most recently by an Amendment No. 4 Order in 2018, and remains in force in its consolidated form.

Key obligations

• Relevant holders (managers, trustees, custodians and operators of recognized funds) must notify the Commission of changes in name, address, controllers, directors, officers, subsidiaries and major shareholdings
• Relevant holders must comply with annual reporting requirements, including reporting staff numbers and the value of recognized funds
• Operators must not use volume overriders, benefits in kind or reciprocal arrangements, and must avoid product bias and excessive charging or churning
• Relevant holders must conduct know your customer checks and assess suitability of units and transactions before dealing with customers
• Advertisements for recognized funds must be approved, clear, not misleading, and must comply with prescribed content and disclosure requirements
• Operators must issue contract notes containing prescribed information for transactions in units of recognized funds
• Relevant holders must establish and maintain compliance procedures and undergo compliance review
• Relevant holders must maintain prescribed accounting and other records, including registers of associates, connected customers, officers and employees, and dealings by officers and employees
• Trustees, custodians and managers must maintain financial resources in accordance with the Order's requirements and notify the Commission of any deficiency
• Relevant holders must prepare and submit annual, quarterly and monthly financial statements in the form and content prescribed by the Order
• Relevant holders must appoint auditors meeting prescribed qualifications and notify the Commission regarding auditor appointment, resignation or removal
• Client money received by a relevant holder must be held on trust in a client bank account, with controls on payment into and withdrawal from that account and regular reconciliation

Applies to

managers of recognized unit trusts, trustees of recognized unit trusts, custodians of recognized open-ended investment companies, operators of recognized funds, recognized open-ended investment companies, auditors of relevant holders, functionaries holding a permit under the Collective Investment Funds (Jersey) Law 1988

Related documents

• This document is made under Collective Investment Funds (Jersey) Law 1988