Valsen Fiduciaries Funds

Guernsey Authorised Fund

The Guernsey Financial Services Commission (GFSC) regulates Authorised funds under the Authorised Collective Investment Schemes Rules 2015 (“the Authorised CIS Rules”) and the Prospectus Rules 2008. This Act sets out the guidelines pertaining to the application and licensing of Authorised funds and other collective investment entities in Guernsey.

About Guernsey Authorised Fund

A Guernsey Authorised Fund is recognised as a mutual fund and is neither a Private nor a Professional Fund. A vehicle established in Guernsey satisfies the criteria for a “collective investment scheme” or “fund”, if it is either registered or authorised by the Guernsey Financial Services Commission (“GFSC”) and no Guernsey-licensed entity can provide services to such a vehicle without it being so registered or authorised.
The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended (the “POI Law”) creates two categories of Guernsey fund.

Guernsey Authorised Fund Legal Requirements

Requirements Description
  1. Applicable legislation

Registered Collective Investment Schemes Rules 2015 (“the Authorised CIS Rules”)

Prospectus Rules 2008

  1. Supervising Authority

Guernsey Financial Services Commission

  1. Corporate vehicle permitted

Incorporated cell company (ICC)

Protected cell company (PCC)

Limited Partnership, Unit trust

  1. Share capital or equivalent
  • Minimum subscription

None

  • Minimum investors

None

  1. Directors / Partners / Trustees
  • Minimum number

1

  • Corporate Directors / Partners / Trustees allowed

Yes

  • Local Directors / Partners / Trustees required

No

  1. Fund functionaries required
 
  1. Custodian
  • Custodian required
No
  • Local custodian required

No

  • Eligible custodian

N/A

  1. Fund manager / Investment manager
  • Fund manager required
Yes
  • Local fund manager required

No

  • Fund manager requires to be licensed

Yes

  • Eligible fund manager

Any licensed fund manager as approved by the GFSA

  1. Fund administrator
  • Fund administrator required
No
  • Local fund administrator required

No

  • Eligible fund administrator

No

  1. External auditor
  • External auditor required
Yes
  • Local external auditor required

No

  • Eligible external auditor

Qualified local auditor or

Foreign auditor if fund is structured as a domestic company

  1. Asset Requirements
  • Restriction on type of asset class invested

None

  • Asset diversification requirements

None

  • Limitation on size of the fund or total assets under management

None

  1. Local physical office required

No

  1. Prospectus / Offering Memorandum required to be filed

Yes

  1. Eligible for listing

Yes

  1. License fees
  • License application fee

USD 3,435

  • Annual license fee

USD 3,435

  1. Estimated license processing duration

3 months

Ongoing Obligations

Requirements Description
Monthly obligations
Office Required
Quarterly obligations
None
Annual obligations
Submit annual audited accounts to FSA within 4 months of the financial year end
Other obligations

The fund is required to continue to comply with the conditions for listing.

The fund is required to keep the holders of its listed units, and the Exchange, informed as soon as reasonably practicable of such information relating to the fund which may be necessary: to enable investors to appraise the financial position of the fund;

  • to inform investors of developments expected materially to affect market activity in the price of its units; and
  • to avoid the establishment of a false market in its units.
    The fund must notify the Exchange of any proposed change in its capital structure, including the structure of its listed units, any new issues of securities, any change in the rights attached to any class of listed securities or to any units into which any listed securities are convertible.

The fund must send with each notice convening a meeting of the holders of its listed units, proxy forms with provision for two-way voting on all resolutions to be proposed.

The fund must respond promptly to any enquiries made by the Exchange concerning unusual movements in the price or trading volume of its listed (or any other matters raised by the Exchange) by giving such relevant information as is available to the fund or, if appropriate, by issuing a statement to the effect that it is not aware of any matter or development that is or may be relevant to the situation.

The Exchange is entitled to require the publication of further information by, and impose additional requirements on a fund where it considers that circumstances so justify, but will allow representations by the fund before imposing any additional requirements on it which are not imposed on listed companies generally.

A fund whose units are listed on any other exchange must ensure that equivalent information is made available at the same time to the Exchange and such other exchanges.

Tax Obligations and Other Exemptions
Requirements Description
Income Tax
Income from fund administration business and provision of custody services is subject to a 10% rate.
Withholding Tax
No withholding tax is payable on dividends and/or interest payable.
Value Added Tax (VAT)
There is no sales tax or value added tax in Guernsey.
Stamp duty Act
Mutual funds are exempt from payment of stamp duty
Trades Tax Act
The Act grants exemption from the payment of trades tax (customs duty) on all imported furniture and equipment (including computers, communication equipment) used by the licensee, in its office in Guernsey, in connection with the business of operating a mutual fund.
Immovable Property Transfer Restriction Act
None
Immigration Decree
Mutual funds are allowed to employ expatriate employees
Exchange Control Act
There are no exchange control rules in Guernsey.
Foreign Earnings Act
The Foreign Earnings Act is not applicable to mutual funds in its entirety.

Benefits of a Guernsey Authorised Fund:

  • Ease and speed of establishment
  • Flexible structuring of the entity
  • Favourable compliance restrictions
  • Friendly regulatory environment
  • A mutual fund in Guernsey can be administered by a Guernsey Licensed fund administrator