Friday, 19 November, 2010

AIFM - Jersey funds will meet new EU standards

AIFM - Jersey funds will meet newly agreed criteria for ongoing access to European markets.

Jersey is the first jurisdiction to confirm that its current regulatory regime will meet the newly agreed EU standards under the AIFM Directive.

After a long period of uncertainty for Jersey domiciled funds and fund managers the EU Parliament has voted to approve a final version of the Alternative Investment Fund Managers Directive which includes significant allowances for the so-called "Third Countries", including Jersey.

In April 2009 the European Commission produced the first draft of a new EU Directive on Alternative Investment Fund Managers (the "AIFM"). This initial draft was considered highly controversial, being labelled as protectionist and anti-competitive by many industry groups, UK politicians and even countries such as the United States of America.

The position of Third Country AIFM's was particularly contentious at the outset but this has now been relaxed by the creation of a dual system thus allowing the existing private placement rules to continue until at least 2018, while at the same time creating an option for Third Country AIFM's to qualify under an EU passporting regime.

Jersey will be among the first non-EU jurisdictions to achieve equivalence by meeting all relevant criteria, and indeed, Jersey is already recognised by international bodies as being amongst the best regulated and most compliant jurisdictions worldwide. Therefore it can be said that Jersey based funds and fund managers will be in an advantageous position as they will benefit from lower costs and practical efficiencies associated with the use of private placement regimes. A system which will no longer be available to EU based funds with EU based fund managers.

If you require further information about this exciting development, please contact Rob Lucas in Jersey on +44 (0)1534 504742.