FAQs

Open ended collective investment schemes are investment vehicles which offer for sale without limitation, or have outstanding securities which investors are entitled to redeem on demand, subject to any applicable notice period. A closed ended investment scheme is a scheme under which the investors are not entitled under the terms of the scheme to have their units redeemed or repurchased by, or out of funds provided by the scheme, or to sell their units on an investment exchange, at a price related to the value of the property to which they relate.

Open ended schemes and closed-ended schemes may be constituted as companies, incorporated cell companies, protected cell companies, unit trusts or limited partnerships. However, the use of a limited partnership for an open-ended scheme would require further discussion with the Commission. Incorporated and Protected cell companies are similar to umbrella schemes but are incorporated as companies not as unit trusts. The assets of each cell may not be combined with the assets of another cell and must be kept legally separate.

Open ended and closed-ended schemes must be either authorised or registered under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("the Law") ​and entities conducting restricted activities in connection with controlled investment business must be licensed under the Law. The Commission has made a number of rules under the Law which set out the detailed requirements to be followed by all authorised and registered schemes and licensees.

The major rules under the Law are:-

• The Licensees (Conduct of Business) Rules and Guidance, 2021 (which cover all licensees including designated administrators and designated custodians of schemes);
• The Licensees (Capital Adequacy) Rules and Guidance, 2021 (which cover all licensees)
• The Collective Investment Schemes (Class A) Rules 2002 (which cover Class A schemes);
• The Authorised Collective Investment Schemes (Class A) Rules 2008;
• The Authorised Collective Investment Schemes (Class B) Rules and Guidance, 2021 (which cover Class B schemes);
• The Collective Investment Schemes (Qualifying Professional Investors) (Class Q) Rules and Guidance, 2021 (which cover schemes designed for qualifying professional investors);
• The Authorised Closed-Ended Investment Schemes Rules and Guidance, 2021 (which cover authorised closed-ended investment schemes);
• The Registered Collective Investment Scheme Rules and Guidance, 2021 (which cover open and closed-ended registered schemes);
• The Prospectus Rules and Guidance, 2021 (which cover registered schemes and offers to the public);
• The Private Investment Fund Rules and Guidance (2), 2021 (which cover Private Investment Funds (PIFs));
• The Guernsey Green Fund Rules and Guidance, 2021 (which cover Guernsey Green Funds);
• The Natural Capital Fund Rules and Guidance, 2022 (which cover Natural Capital Funds).

Under section 8 of the Law open-ended and closed-ended schemes can apply to be authorised or registered.

Both authorised and registered schemes must appoint a local licensed designated administrator. The designated administrator must conduct due diligence on the promoter of an authorised or registered scheme. However, in respect of a registered scheme the designated administrator is required to certify at the time of the application that it has undertaken due diligence on the promoter of the registered scheme. The Commission has established clear guidelines of the minimum criteria for the due diligence to be undertaken by the designated administrator. For further details refer to the Guidance on Registered Collective Investment Schemes.

The designated administrator of a registered scheme must also sign a declaration confirming that the disclosures in the scheme’s prospectus/offer document or equivalent meet the requirements of the Prospectus Rules and Guidance, 2021.

The Commission attaches great importance to these warranties. It expects applicants to be able to demonstrate that they have documentary evidence to support the warranties given, and to be able to produce that evidence immediately should the Commission request it. Failure to support a warranty by supporting documentation might be taken into account by the Commission in assessing ongoing fitness and properness under schedule 4 to the Law. Consequently, because the designated administrator has to provide these warranties to the Commission we are able to declare the scheme registered within three working days of receipt.

Whilst designated administrators must conduct due diligence on the promoter of an authorised scheme, it is not required to provide warranties to the Commission. Instead there is a three stage application process for authorised schemes. For further details please refer to Applications for Closed-ended Collective Investment Schemes and Applications for Open ended Collective Investment Schemes.

The rules for Class B schemes incorporate a measure of flexibility, consistent with meaningful investor protection, and are applied by the Commission exercising judgement and discretion and taking into account all the facts pertaining to a particular fund application. This policy recognises that Class B schemes range from the retail fund aimed at the "general public" via institutional funds to the strictly private fund established solely as a vehicle for investment by a single institution, and that their investment objectives and risk profiles are similarly wide-ranging. Accordingly, the rules do not incorporate specific investment, borrowing and hedging restrictions. This also allows for the possibility of new products without the need to amend the Commission's regulation.

Historically, a substantial number of Class B schemes have been targeted at institutional investors. The Class Q Rules seek to provide a clear and concise set of requirements for the operation of professional investor funds and have been designed to encourage innovation. Accordingly, the Rules place emphasis on disclosure of risks inherent in the investment vehicle, rather than prescription, simplified document requirements, timely processing of applications and no prescribed minimum subscription requirement. Since the introduction of the Class Q Rules in 1998 fund managers in Guernsey have taken advantage of the flexibility in regulations covering qualifying professional and sophisticated investors whilst Class B schemes continue to cater for the more innovative products.

​Please see Guide to Risk Based Supervision.

There is a policy of selectivity which, in the context of open or closed ended schemes, means that great weight is given to the status of the intended promoters/sponsors. Only those of the first rank are encouraged and normally a demonstrable and favourable track record in the promotion of established collective investment schemes is required.

The authorisation of intended promoters/sponsors by regulatory authorities in other jurisdictions is not, in itself, generally sufficient. Subject to the foregoing, the Commission's policy is to be as flexible as possible and consistent with meaningful investor protection. The Commission is always prepared to meet potential promoters/sponsors or their professional advisers in order to discuss matters of policy and practice regarding proposed open or closed ended schemes.

​The Collective Investment Schemes (Compensation of Investors) Rules 1988 (as amended) provide for compensation for investors in Class A schemes of up to £5mn in any year. Subject to this limit, the maximum compensation payable per investor is 90% of the first £50,000 and 30% of the balance of up to £100,000 (i.e. a maximum total of £60,000). To date, no call has been made on the compensation scheme.

There is no compensation scheme covering investors in Class B schemes, Class Q schemes, authorised closed ended investment schemes, or registered collective investment schemes.​

The following should not usually be regarded as collective investment schemes for Guernsey purposes:          

 Joint ventures: should not generally be regarded as collective investment schemes due to the joint venture governance model which allows all of the parties day-to-day control and discretion over the business and no external capital is being raised as the joint venture parties are themselves providing the capital.  The parties raising and providing the capital are the same.

 Carried interest vehicles: should not be regarded as a collective investment scheme because they are either classified as an employee participation scheme or because the capital contribution being made by the participants is so small that they cannot be regarded as in any real sense "investors" for the purposes of the collective investment scheme definition.

 Acquisition/holding company vehicles:  may fall outside the collective investment scheme definition because the vehicle is not raising capital but is just a means of deploying capital already raised.

 Single investment vehicle: a vehicle which is established to hold only one asset should not be regarded as a collective investment scheme because there is no investment management required in relation to the vehicle nor is there a defined investment policy.

 Single investor vehicle: a vehicle which has as its beneficial owner one individual or non-collective investment scheme vehicle may not be regarded as a collective investment scheme.

Rule 4.2(1)(c) of the Licensees (Conduct of Business) Rules and Guidance, 2021 requires the auditor’s report to contain a statement of financial resources certified by the auditor confirming that the appropriate financial resources requirement is satisfied. In practice, the licensee prepares the financial statements and within that there is a schedule detailing the financial resources requirement statement as required under the relevant Rules. Auditors merely make reference to it in their audit report. In the case of licensees falling under Rule 2.1(1)(d) of the Licensees (Capital Adequacy) Rules and Guidance, 2021, the opinion is driven by the directors and not the auditors. Therefore, by way of clarification, for licensees falling under this rule, as there is no quantitative rules-derived requirement for levels of net assets (other than a minimum of £10,000), there is not an expectation for the auditor's report, in practice, to include the statement of financial resources certified by the auditor.

The promotion of controlled investments (as defined in the POI Law) is a restricted activity and requires a licence if carried on in or from within the Bailiwick, unless one of the statutory exemptions applies. 

A firm with a main place of business in a country or territory that has been designated for the purposes of section 44(1)(c) of the POI Law* promoting collective investment schemes (as described in category 1 and category 2 of Schedule 1 to the POI Law) to the public in the Bailiwick of Guernsey does not require a licence provided that the following requirements are met:

(a)    The firm does not have a permanent place of Business within the Bailiwick;

(b)    The firm is an entity established in a country or territory designated for the purposes of section 44(1)(c) and has provided evidence that it is recognised as a national of that Designated Country or Territory;

(c)    The collective investment scheme falls within the categories specified in the Designated Countries & Territories Regulations that make designations in respect of section 44(1)(c);

(d)    The promotion is carried out in accordance with the laws of that Designated Country or Territory;

(e)    Prior notice is given to the Commission by completion of a Form EX and submission of the requisite documentation (here); and  

(f)     The Commission has issued confirmation of the exemption.

An overseas promoter does not require a POI licence if it engages the services of a person licensed to carry on promotion in Guernsey (the POI licensee) and the POI licensee carries out the promotion in Guernsey on the overseas promoter’s behalf, provided that the overseas promoter enters into the service contract with the POI licensee outside of the Bailiwick. 

The promotion of services is not a restricted activity under the POI Law and does not require a POI licence.

The promotion of controlled investments (as defined in the POI Law) is a restricted activity and requires a licence if carried on in or from within the Bailiwick, unless one of the statutory exemptions applies. 

An overseas promoter does not require a POI licence if it engages the services of a person licensed to carry on promotion in Guernsey (the POI licensee) and the POI licensee carries out the promotion in Guernsey on the overseas promoter’s behalf, provided that the overseas promoter enters into the service contract with the POI licensee outside of the Bailiwick.

Where restricted activities are conducted by a firm without a base in the Bailiwick of Guernsey at the initiation of the client, i.e. on a reverse solicitation basis, then a licence is not required.

Promotion of controlled investments to regulated entities in the Bailiwick of Guernsey may be exempt from licensing in certain circumstances – for further details please see the FAQ below.

Promotion of controlled investments under any other circumstances in, or from within, the Bailiwick of Guernsey will require a licence under the POI Law.  Please contact the Commission or seek legal advice if you are unsure of your position.

The Commission reminds firms that, in addition to the direct penalties for unlicensed promotion set out in the POI Law, any contract with an investor which is entered into in the course of carrying on controlled investment business (as defined in the POI Law) in contravention of the POI Law may be unenforceable, and the investor may be entitled to a return of any subscription monies paid.

The promotion of controlled investments (as defined in the POI Law) is a restricted activity and requires a licence if carried on in or from within the Bailiwick, unless one of the statutory exemptions applies. 

A firm with a main place of business in one of the countries or territories designated for the purposes of section 44(1)(d) of the POI Law* promoting controlled investments (as described in category 1 and category 2 of Schedule 1 to the POI Law) to certain licensed entities in the Bailiwick of Guernsey does not require a licence provided that the following requirements are met:

(a)          The firm does not have a permanent place of Business within the Bailiwick;

(b)          The firm is an entity established in a country or territory listed in the first column of the Schedule to the Investor Protection (Designated Countries and Territories) (Bailiwick of Guernsey) Regulations, 2017;

(c)          The promotion is carried out in accordance with the laws of that Designated Country or Territory;

(d)          The promotion is only carried out to these licensed entities are persons licensed to carry on business under any of the following laws:

(i)           the POI Law;

(ii)          the Regulation of Fiduciaries, Administration Businesses and Company Directors, etc (Bailiwick of Guernsey) Law, 2020;

(iii)         the Banking Supervision (Bailiwick of Guernsey) Law, 2020;

(iv)         the Insurance Business (Bailiwick of Guernsey) Law, 2002, or

(v)          the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002. 

(e)          Written notice of the date from which the firm intends to carry out the promotional activity is given to the Commission by completion of the following webpage form; (here)

An overseas promoter does not require a POI licence if it engages the services of a person licensed to carry on promotion in Guernsey (the POI licensee) and the POI licensee carries out the promotion in Guernsey on the overseas promoter’s behalf, provided that the overseas promoter enters into the service contract with the POI licensee outside of the Bailiwick.

Where restricted activities are conducted by a firm without a base in the Bailiwick of Guernsey at the initiation of the client, i.e. on a reverse-solicitation basis, then neither a licence nor a notification is required.

*The regulations setting out the Designated Countries and Territories for the purposes of s44(1)(d) of the POI Law are set out in the Investor Protection (Designated Countries and Territories) (Bailiwick of Guernsey) Regulations, 2017.  A copy of these regulations can be found at www.guernseylegalresources.gg 

The definition of promotion in the POI Law is as follows:

(a)    advertising,

(b)    issuing a prospectus, application form or proposal form,

(c)    circulating or making available promotional material.

To be a restricted activity (requiring a licence or exemption) the promotion must be carried on in or from within the Bailiwick of Guernsey. 

Ultimately interpretation of the law is a matter for the Courts and not the Commission however, it is the Commission’s view that marketing campaigns that do not originate from within the Bailiwick and do not specifically target Bailiwick residents (but might include the Bailiwick as part of a wider population) are unlikely to constitute a restricted activity.  Please contact the Commission or seek legal advice if you are unsure of your position.

The Commission recognises that the 2000 Guidance Note on the Promotion of Investments under the Protection of Investors (Bailiwick of Guernsey) Law, 1987, and 2001 Protection of Investors (Bailiwick of Guernsey) Law, 1987 Promotional Activities Policy Guidance issued by the Commission created a legitimate expectation for firms that promotion of controlled investments by overseas firms to licensed entities did not require a licence.  Therefore, the Commission has no intention of taking action against firms who reasonably acted in reliance on those Guidance Notes.

The Guidance Notes have now been removed from the Commission’s website and should not be relied upon.

Before a change to a designated person of a registered collective investment scheme can take place, the Commission must first have confirmed the designation of the new party. Please refer to the guidance here.

A change to the name or address of one of the following parties to the scheme must be notified to the Commission immediately:

• Designated administrator
• Designated custodian
• Directors
• Secretary
• General partner and directors of managing general partner
• Trustee of a unit trust and director of a trustee
• Auditors
• Legal advisers
• Principal bankers

The notification to investors of any of the above changes must be registered by the Commission before it can be circulated to investors.

Where appropriate, the notification to the Commission should include a warranty by the designated administrator that they are content that the disclosures in the notification meet the requirements of the Prospectus Rules and Guidance, 2021.

Incorporation of a PCC or an ICC in the Bailiwick requires written consent from the Commission, pursuant to Sections 438 and 469 of The Companies (Guernsey) Law 2008, respectively. This is also the case when the PCC or ICC is not going to be carrying out regulated financial activities.

When considering whether it is appropriate for a PCC or an ICC to be incorporated, the Commission must have regard to protection of the public interest. This includes the need to:

• Protect the public, in Guernsey and elsewhere, against the effects of dishonesty, incompetence, and malpractice
• Counter financial crime and the financing of terrorism in Guernsey and elsewhere, and
• Protect and enhance the reputation of the Bailiwick as a financial centre.

A written request for consent to incorporate should be sent to [email protected]. The submission must include details of all the directors and beneficial owners of the proposed PCC/ICC, together with a high-level business plan for the structure. The latter should include details of all related entities and service providers.

An application fee must accompany any request for consent to incorporate when the PCC/ICC will not be directly regulated by the Commission.

For the Commission to carry out its role effectively, it is vital that accurate and timely information is submitted in order for us to perform our functions. The failure to submit the required data to the Commission can restrict us in carrying out effective supervision, monitoring and interaction with sectors and firms and can lead to the inadvertent focusing of resources away from key risk areas. It can also reduce our ability to accurately identify possible issues and risks in a timely manner.

The failure to submit annual audited financial statements for a collective investment scheme is considered a serious matter by the Commission and a standard regulatory approach is taken to protect investors, the public and the reputation of the Bailiwick as a finance centre. In addition to the imposition of an administrative financial penalty as outlined in The Financial Services Commission (Fees and Administrative Penalties) Regulations, 2023, the Commission may also serve notice that, pursuant to section 54(2) of The Protection of Investors (Bailiwick of Guernsey) Law, 2020 (“the Law”), it is proposing to take the decision to exercise its power under section 9 of the Law to impose conditions on the authorisation or registration of the collective investment scheme.

A basket authorisation or registration is considered one collective investment scheme. Each constituent part should have a common accounting year end date and a common auditor, to facilitate timely submission of accounts for the basket as a whole (even if the accounts for constituent parts are not consolidated). Where one or more constituent parts of the basket have failed to meet the required deadline, it is considered that the collective investment scheme has missed the submission deadline and the notice of intention to impose conditions will be applied to the basket authorisation or registration and will therefore apply to all constituent parts of the basket.

The Commission is mindful that there may be exceptional circumstances that, in order to comply with the above, it would require a modification or derogation from a scheme’s applicable rules for submitting audited financial statements, and these requests will be considered on a case-by-case basis. It should however be noted that when considering whether or not to agree to a modification or derogation which could have the effect of limiting the Commission’s regulatory oversight of such a scheme or where, if allowed, it would potentially adversely impact levels of investor protection, it is unlikely that the Commission would agree to any such request.

The vast majority (on average 98%) of collective investment scheme annual audited financial statements are submitted by the required deadline.

Section 79 of the Protection of Investors (Bailiwick of Guernsey) Law, 2020 (“the POI Law”) defines a recognised investment exchange as one “…which appears to the Commission to be situate in, and recognised as an investment exchange within the law relating to investment exchanges of:

   (a) any member State of the European Union,

   (b) any jurisdiction prescribed by rules of the Commission, or

   (c) any jurisdiction specified in writing by the Commission in any particular case or for any particular purpose,”

Following the United Kingdom’s exit from membership of the European Union, the Commission has specified that an investment exchange which is situate in, and is recognised as an investment exchange within the meaning of the law relating to investment exchanges of, the United Kingdom, is a recognised investment exchange (see linked document), for the purposes described in that document.

For the avoidance of doubt, an entity which is licensed by the Commission under the POI Law to conduct the restricted activity of operating an investment exchange is also considered to be a recognised investment exchange for the purposes of the POI Law.

N.B. The term “recognised investment exchange” should not be confused with the term “recognised stock exchange” which is defined in the Beneficial Ownership (Definition) Regulations, 2017 and which serves a different purpose.

The Commission supports innovation and recognises the role tokenisation could play in improving efficiency within capital markets. The Commission is aware of growing interest, locally and internationally, in the application of this technology within the funds sector and this is an area of focus for fund regulators globally.

The Commission’s overall position is to encourage technology which enhances services to investors and increases efficiency and effectiveness of operations in the Bailiwick. Such technology must clearly comply with the Bailiwick’s framework of law and rules designed to protect investors and counter financial crime but, if there are specific rules which those wishing to trial new technology feel stand in the way of their efforts, we are happy to discuss whether a waiver might be granted on a pilot basis or a rule redrafted if the movement of technology has made its original design obsolescent.

The current Bailiwick regulatory regime permits fund tokenisation, i.e. the register of holders of units in a Bailiwick registered or authorised collective investment scheme may be maintained by using distributed ledger technology and tokens issued as a digital representation of the ownership of such units. It should be noted that:

• the collective investment scheme would still be required to comply with the provisions of the Protection of Investors (Bailiwick of Guernsey) Law, 2020 and the applicable underlying fund rules.
• the licensed Designated Administrator of the collective investment scheme would also remain responsible for administering the scheme in line with applicable law, including the Proceeds of Crime regime. (In that respect a private, permissioned blockchain would be required to be used, under the control of the Designated Administrator.)
• a token issued specifically as described above would not constitute a virtual asset for the purposes of the Lending Credit and Finance Law (Bailiwick of Guernsey) Law, 2022.

The Commission is aware that more advanced features of fund tokenisation may be considered in the future (e.g. using public, permissionless blockchains), and such features may pose additional risks and may not be consistent with the Bailiwick’s current regulatory framework. The Commission will monitor developments and welcomes continued engagement with the funds sector to ensure that the Bailiwick’s regulatory framework remains fit for purpose, reflecting changing technologies and practices, while continuing to meet international regulatory standards.

The above statement relates only to tokenisation of collective investment schemes as described above. The Commission continues to believe that crypto and virtual asset issuances can represent a significant area of risk, particularly to retail investors. Please see the Commission’s previous statement on this activity: [Innovations — Commission — GFSC].

Typically, only a single form is required to be submitted. There are three different application forms, one for each application route. In the case of a Route 1 PIF, the Application Form combines the application form for the PIF and the Licensed Manager.  For Routes 2 and 3, there is no requirement to appoint a manager which is licensed under the POI Law. However, if one is to be appointed to a scheme applying under Routes 2 or 3, then an additional application form will be required. Further details of the application process can be found here.

For all application routes, a fee for the Private Investment Fund is required (this is the Application Fee for a Collective Investment Scheme). For Route 1 applications, a fee for the Licensed Manager is also required (this is the Application Fee for either a Principal Manager of authorised or registered open-ended collective investment schemes or a Manager of authorised or registered closed-ended collective investment schemes). For Route 2 or 3 applications, there is no requirement to appoint a manager which is licensed under the POI Law.  However, if one is to be appointed to a scheme applying under Routes 2 or 3, and it is not already licensed, then this entity will also be subject to a new licence application fee.

The current fees may be found here. Annual fees apply to the Private Investment Fund and a Licensed Manager, where one is appointed, and at the point of licensing/registration these fees are pro-rated.

The philosophy of the Route 1 PIF is that there is a close relationship between investors and management; therefore, it is not an unreasonable representation for the Licensed Manager to make. If the Licensed Manager is not willing to complete the declaration, then clearly the Private Investment Fund is not the product for them.

The Commission is not prescriptive as to how the Licensed Manager satisfies itself as to the ability of the investors to sustain loss. The Commission would accept the use of a form of declaration from the investor to the Manager provided that this was not the sole due diligence performed. Nor has the Commission stipulated a minimum subscription amount as this also would not, in our view, be a strong determinant for demonstrating the ability of an investor to sustain loss. See the next FAQ for further examples of how the declaration may be satisfied.

As stated above, the Commission expects the relationship to be sufficiently close to allow for other measures to be used by the Licensed Manager to affirm that the investors could suffer loss. The Commission, whilst not imposing rules on the Licensed Manager of the Private Investment Fund, sees its role as one of substance in the discharging of corporate governance. The philosophy is that the manager through their relationship with the promoter, will have a relationship with the investors. The Commission acknowledges that the burden on the manager to affirm an investor's ability to sustain loss can only fall at the time the subscription is made.

The Commission will treat any failures in the process leading to the signing of such a declaration extremely seriously.

It is not the intention of the Commission for this requirement to apply to the Designated Administrator of a PIF which is applied for via Route 1. It is difficult to see how a Designated Administrator can have this relationship at the outset, and therefore the regime does not anticipate this role being fulfilled. This is why the requirement is placed on the Licensed Manager of Route 1 PIF applicants.

• Investor has a genuine close relationship with the promoter/manager through previous deals.
• Complete an investor log/memorandum/assessment form to consider some or all of the following information:

Personal information (name, address, occupation etc.);

an explanation of the relationship between the manager/promoter and the investor;

the investor’s background, including how they amassed their wealth, details of financial standing e.g. details of annual income, net worth, their experiences as an investor including details of similar investments, the overall value of their portfolio and the value of their liquid net assets;

a description of the investor’s size and their governance regime (if corporate entity or equivalent);

how liquid is the investment;

information about the investor’s attitude to risk and their capacity for loss.

• Minimum subscription be set at a level that would deter investors not able to sustain potential losses should they occur.
• A prospectus issued in which the investment strategy and risks are clearly defined, which investors acknowledge, by way of a declaration, that they have read and understand when they subscribe to the fund.

 The investor log/memorandum/ assessment form could be supported by a variety of documents obtained from the investor or from public sources which may include:

• A copy of their latest tax return;
• If investing through a corporate vehicle or equivalent a copy of the latest audited accounts;
• A certificate from their accountant as to their net worth;
• A certificate from their accountant as to the proportion of their net worth that is going to be invested;
• Any certificate provided in the last 12 months under the regulatory requirements of their jurisdiction of residence or domicile as to their status as an investor (i.e. as a professional or sophisticated investor).

Upon application via the submission of the Application Form PIF Route 1, the Licensed Manager will be licensed at least for the restricted activity of Management and any other restricted activity to be determined by the applicants. Any additional restricted activities should be detailed on the Application Form PIF Route 1.

Route 1 PIF – the PIF should contain no more than 50 legal or natural persons holding an ultimate economic interest in the private investment fund, save in the instance where the investment is made by an investment manager acting as agent for investors in a collective investment scheme or equivalent, pension holders in an occupational pension scheme, or government funds – whether local or sovereign.

Route 2 PIF – the PIF should contain no more than 50 legal or natural persons holding an ultimate economic interest in the private investment fund. The number of offers of units for subscription, sale or exchange must not exceed 200. This is not intended to capture pre-marketing material.

Route 3 PIF – there is no restriction on the total number of investors, although this number will be constrained by the relevant family relationship.

Yes.

However, for a Route 1 PIF excepting a period of one year commencing from the date of first subscription, there is a "rolling test" applied on a continuous basis. In the previous twelve months, the Private Investment Fund can add no more than 30 new ultimate investors. This test must be applied and evidenced by the Licensed Manager of the Private Investment Fund. The Manager shall keep a record of such tests. For the avoidance of doubt at all times the maximum number of investors allowed is 50 as defined in the FAQ above.

For a Route 2 PIF the number of offers of units for subscription, sale or exchange must not exceed 200 and the number of investors must be no more than 50 persons.

No, there is no minimum subscription requirement.

Yes. The Private Investment Fund itself is not a Financial Services Business (FSB) so either the Licensed Manager or the Designated Administrator acting for the PIF will be responsible for ensuring the obligations under the AML/CFT regulations and Handbook are adhered to. Where a Licensed Manager is appointed it will be considered an FSB and will be required to have a MLRO and MLCO appointed to it and will be required to produce a Business Risk Assessment.

Yes, a Private Investment Fund may be legally structured as either a Protected Cell Company or an Incorporated Cell Company, as alternatives to a Limited Company, a Limited Partnership or a Limited Liability Partnership.

In the case of either a Protected Cell Company or an Incorporated Cell Company, for Route 1 and Route 2, the relevant investor restrictions shall apply to each individual cell.

Investment in each Route 3 PIF is restricted to a single family relationship irrespective of the structure of the fund vehicle.

In the case of a Route 1 PIF the Licensed Manager is required to provide a new declaration for each new cell, sub-fund or share class of the PIF, whether open-ended or closed-ended.

For all PIF Routes it will not be necessary for the Designated Administrator to give a new declaration in respect of each new cell/sub-fund/share class, as their original declaration relates to the fund. The Designated Administrator will, however, be obliged to notify the Commission if they are no longer satisfied that the Licensed Manager (promoter) is fit and proper. This obligation applies at all times throughout the life of the PIF.

In the case of open-ended PIFs, for all Routes, the relevant fee should also be submitted in respect of each new cell, sub-fund or share class.

Where an entity licensed under the Protection of Investors (Bailiwick of Guernsey) Law, 2020 ("the POI Law") acts solely as the manager to one or more Private Investment Fund ("PIF"), and does not undertake any other Controlled Investment Business, then the Commission will dis-apply the Licensees (Conduct of Business) Rules and Guidance, 2021 in respect of that Licensee. Furthermore, and pursuant to Section 43(9) of the POI Law, the Commission exempts entities which are licensed under the POI Law who act solely as the manager to one or more PIFs from the application of Section 43(1) of the POI Law (being the requirement to appoint an auditor). Therefore, the Commission does not require a PIF Manager to appoint an auditor or to prepare and submit audited accounts to the Commission (for itself as a Licensee). Whilst the above relates solely to the Commission's requirements, such Licensees and their Directors and Administrators should remain mindful of any obligations of the Licensee to other parties in respect of these matters (for example the requirements contained in their constitutive documents, or any other legislation to which they might be subject). For the avoidance of doubt, the above comments relate to PIF Managers. The PIF itself is still required to appoint an auditor and to prepare and submit audited accounts to the Commission in accordance with the Private Investment Fund Rules and Guidance (2), 2021.

​No.  Rule 2.7(10) is intended to cover management or advisory charges, however described and prescribed, in order to prevent double-charging thereon by those who are making, or advising on, investment decisions.  The exception to this is in respect of feeder fund structures, as described at Rule 2.7(11) – in which case the fee structure should be fully disclosed.