Financial Services (Investment Business (Qualifying Segregated Managed Accounts – Exemption)) (Jersey) Order 2014

Summary

This Order creates a limited exemption from registration requirements under the Financial Services (Jersey) Law 1998 for operators of Qualifying Segregated Managed Accounts (QSMAs) - typically hedge fund managers running discretionary segregated accounts for a single family group or for an employer and its senior employees, replicating strategies used in a reference fund. It sets out the conditions an account must meet to qualify as a QSMA (Schedule 1) and the conditions an operator must meet to rely on the exemption (Schedule 2), together with a mandatory client warning (Schedule 3).

• QSMA conditions: A single operator, no operator ownership/custody of assets, no formal division or unitisation among multiple participants, participants connected by family or employment ties, a minimum required commitment of US$1 million, written QSMA warning given and acknowledged, and use of only qualifying hedge fund strategies.
• Operator conditions: The operator must be registered to conduct relevant fund services business, be appointed to manage one or more hedge funds and generally perceived as a hedge fund manager, notify the Commission of reliance on the exemption, pay the QSMA fee unless exempted, treat all clients fairly, and report quarterly on QSMA numbers and aggregated asset values.
• Effect of exemption: An operator meeting Schedule 2 conditions is exempt from most of the Financial Services (Jersey) Law 1998 for its QSMA activity, but certain enforcement, conduct and Commission-powers articles continue to apply as if the operator were registered.

The Order remains in force in its consolidated form; the underlying instrument commenced on 26 November 2014, with the current version reflecting later 2025 amendments to family connection definitions.

Key obligations

• Operator must give notice to the Commission (in the Commission's specified form) that it has been appointed as operator of a QSMA and intends to rely on the exemption, unless it has previously done so, and must receive written confirmation of receipt from the Commission
• Operator must pay the QSMA fee for each relevant charging period by the due date specified in the QSMA fee notice, unless a fee exemption applies
• Operator must ensure all clients of the QSMA are dealt with fairly as between each other and that no client is given unfair advantage
• Operator must report to the Commission, no later than 15 business days after each calendar quarter date, the number of QSMAs relying on the exemption and the aggregated value of investments under management in those QSMAs
• Operator must give each participant the QSMA warning in writing at the qualification date and at each new participant date, and obtain written acknowledgement (which may be satisfied via a signed mandate document containing the warning prominently)
• QSMA account structure must continuously satisfy the Schedule 1 conditions (single operator, no operator ownership/custody, no formal division of interests, permitted participant connections, minimum required commitment, use of only qualifying strategies) for the account to remain exempt

Applies to

investment business operators, hedge fund managers, persons registered under the Financial Services (Jersey) Law 1998 to conduct fund services business, operators of segregated managed accounts, participants in qualifying segregated managed accounts

Deadlines

• 15 business days after each calendar quarter date: Reporting date by which an operator must inform the Commission of the number of QSMAs relying on the exemption and the aggregated value of investments under management
• due date specified in the QSMA fee notice: Deadline by which the QSMA fee for a charging period must be paid to the Commission unless a fee exemption applies
• 26 November 2014: Commencement date of the original Order

Related documents

• This document is made under Financial Services (Jersey) Law 1998