Government of Jersey

Information about the publication of Ministerial Decisions

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demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
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A decision made on 17 May 2012:

Decision Reference: MD-E-2012-0056
Decision Summary Title :	Collective Investment Funds (Certified Funds - Prospectuses) (Jersey) Order 2012 made pursuant to the provisions of the Collective Investment Funds (Jersey) Law 1988		Date of Decision Summary:	16 May 2012
Decision Summary Author:	Director, Finance Industry Development		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Collective Investment Funds (Certified Funds - Prospectuses) (Jersey) Order 2012		Date of Written Report:	16 May 2012
Written Report Author:	Director, Finance Industry Development		Written Report : Public or Exempt?	Public
Subject: Approval of the Order drawn pursuant to the Collective Investment Funds (Jersey) Law 1988.
Decision(s): The Minister approved and made the following Order pursuant to the Collective Investment Funds (Jersey) Law 1988: Collective Investment Funds (Certified Funds – Prospectuses) (Jersey) Order 2012 (“the Prospectuses Order”).
Reason(s) for Decision: Articles 14 and 20 of the Collective Investment Funds (Jersey) Law 1988 gives the power to the Minister for Economic Development (on the recommendation of the Jersey Financial Services Commission) to prescribe matters relating to Collective Investment Funds by Order. The Jersey Financial Services Commission has recommended that the Minister for Economic Development prescribe the fees as set out in the Prospectuses Order in order to match international standards relating to funds.
Resource Implications: There are no financial or manpower implications arising as a result of this decision.
Action required: The Minister to sign, date and seal the Prospectuses Order and for it to be returned to the States Greffe without delay and a request made to the Greffier of the States to arrange for the Order to be notified to the States.
Signature: Senator AJH Maclean		Position: Minister for Economic Development
Date Signed:		Date of Decision (If different from Date Signed):

Collective Investment Funds (Certified Funds - Prospectuses) (Jersey) Order 2012

COLLECTIVE INVESTMENT FUNDS (CERTIFIED FUNDS – PROSPECTUSES) (JERSEY) ORDER 201- (the Certified Funds Prospectuses Order)

Issue and recommendation

The Minister is asked to make a Certified Funds Prospectuses Order relating to prospectuses requirements for funds in order to meet international standards set by the International Organisation of Securities Commissions (IOSCO).

It is recommended that the Minister signs the Order in order to bring it into force and instructs his officers to undertake the necessary formalities.

Background

In June 2009 the Jersey Financial Services Commission published Consultation Paper (No. 5 of 2009) (the “2009 Consultation Paper”) seeking views on proposals relating to the requirements for prospectuses of Jersey collective investment funds issued with a certificate under the Collective Investment Funds (Jersey) Law 1988 (the CIF Law).

The paper proposed the introduction of a new statutory Order under the CIF Law, namely the Collective Investment Funds (Certified Funds – Prospectuses) (Jersey) Order 201-. The proposals involved amending the Companies (General Provisions) (Jersey) Order 2002 (the “CGPO”) and revoking the Collective Investment Funds (Unclassified Funds) (Prospectuses) (Jersey) Order 1995 (the “UFPO”). The consultation period closed on 31 August 2009.

The objective of the exercise was to encompass the prospectus regulations relating to closed-ended and open-ended Jersey collective investment funds into one Order for the sake of convenience, and to extend the scope of regulation of prospectuses to all types of fund vehicle, to include unit trusts and limited partnerships. In addition, the opportunity was taken to introduce a number of new provisions to ensure Jersey continues to meet international standards laid down for funds and fund services businesses by the International Organisation of Securities Commissions (IOSCO).

The following tables indicate the current shortfalls with respect to regulation of prospectuses, and the position the Commission seeks to attain through the proposed amendments set out in the Certified Funds Prospectuses Order:

The present position:

Fund type	Applicable Order
	UFPO	CGPO
Companies – open-ended	√
- closed-ended		√
Unit Trusts - open-ended	√
- closed-ended
Limited Partnerships - open-ended
- closed-ended
Limited Liability Partnerships - open-ended
- closed-ended
Companies that are not collective investment funds		√

The revised position:

Fund type	Applicable Order
	Certified Funds Prospectuses Order	CGPO
Companies – open-ended	√
- closed-ended	√
Unit Trusts - open-ended	√
- closed-ended	√
Limited Partnerships - open-ended	√
- closed-ended	√
Limited Liability Partnerships - open-ended	√
- closed-ended	√
Companies that are not collective investment funds		√

All prospectuses for certified funds will be subject to the requirements of the Certified Funds Prospectuses Order irrespective of the current type of fund vehicle used or whether the fund is open-ended or closed-ended. In future the CGPO will only be applicable to prospectuses issued by Jersey companies that are not constituted as collective investment funds for the purposes of the CIF Law. The UFPO will be revoked.

The Commission believes the proposed changes will mean a change in practice for Industry, in particular those lawyers instructed to draft or review offering documents for certified funds. Nonetheless, a simplified regime should bring cost benefits in that there will only be one format to follow, namely the Certified Funds Prospectuses Order, and it will reduce the time taken by the Commission to review prospectuses of certified funds. There may be some cost implications in the short term with the redrafting of existing prospectuses; Article 12 of the Certified Funds Prospectus Order contains various time limits by which the prospectus for an existing fund must comply with the Certified Funds Prospectuses Order depending on the nature of the fund. The Order takes effect six months from the date it is made in order to allow sufficient time for those currently preparing prospectuses to take account of the changes.

The Certified Funds Prospectuses Order takes the existing UFPO as its base and adopts certain provisions and wording of the CGPO which currently applies to closed-ended funds constituted as companies. It also contains a number of new provisions, including some definitions taken from the Collective Investment Funds (Recognized Funds) (Rules) (Jersey) Order 2003.

The proposal to make these changes was the subject of a public consultation paper issued by the Commission. The paper (Reference 5 / 2009), was issued in June 2009 and the consultation period closed on 31 August 2009. The Commission received extensive comments from Jersey Finance Limited (“Jersey Finance”) and the Jersey Funds Association (“JFA”). Since publication of the consultation paper the Commission has undertaken numerous and very detailed discussions with both bodies in order to deal with issues arising. The decision to proceed with steps to establish the new requirements was communicated to Industry in a feedback paper issued by the Commission in August 2011.

The Commission has stated that further discussions were held with both Jersey Finance and the JFA to the point where both bodies are now content with the Order.

Pursuant to the requirements of Articles 14 and 20 of the CIF Law the Board of Commissioners has recommended that the Minister makes the Certified Funds Prospectuses Order.

Financial and Manpower Implications

There are no financial or manpower implications for the States.

Recommendation

It is recommended that the Minister signs the Certified Funds Prospectuses Order in order to bring it into force and instructs his officers to undertake the necessary formalities.

James Mews

Director, Finance Industry Development

16 May 2012

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