By Andrew Elder, Chief Commercial Officer, Guernsey
The Guernsey Financial Services Commission (GFSC) has recently updated the Guernsey Private Investment Fund (PIF) rules, adding further flexibility to the regime and opening the PIF to a wider range of investors.
The enhancements continue the GFSC’s commitment to regulatory and product innovation, providing a proportionate regime for funds targeting all forms of sophisticated investors.
What are the key changes?
The key changes include:
- No mandatory audit requirement for a PIF, although it may still elect to be audited
- No limit to the number of investors in a PIF, or to the number of investors to whom a PIF may be offered
- No requirement to prepare a prospectus or other similar disclosure documentation for a PIF
- No requirement to appoint a Guernsey-licensed manager for a PIF (as required previously for a Route 1 PIF)
- Consolidation of two of the previous PIF routes, meaning there are now just two types of PIF: Qualifying PIFs and Family PIFs
For the purpose of a Qualifying PIF, all investors must be a Qualifying Private Investor (QPI), meaning an investor who:
- Can evaluate the risks and strategy of investing in the PIF
- Can bear the consequences of investment in the PIF, including the possibility of any loss arising from the investment
- Falls within one of the following categories of investor:
- Professional investors
- Experienced investors
- Knowledgeable employees
- High-net-worth investors
- UK professional clients
- EU professional clients
- S. accredited investors
- Licensee admitted investors
The rules relating to a Family PIF are largely unchanged, allowing family members to invest alongside each other in a single vehicle that applies proportionate regulatory requirements.
Importantly, the updated PIF rules retain the one-day turnaround time for regulatory approval.
Summary
The new PIF rules offer a simplified and streamlined regime, creating a flexible, marketable fund structure for a wide range of private capital investment strategies, targeting all forms of sophisticated investors.
This flexibility, proportionate regulation, market access and speed to market, makes the Guernsey PIF an ideal solution for all manner of alternative asset investment managers and their investors.
