The new regime seeks to cut the cost and processing time of launching a fund.

Guernsey has introduced a Private Investment Fund regime to provide fund managers with greater flexibility and simplicity through a quick regulatory turnaround.

The PIF, developed by the Guernsey Financial Services Commission in consultation with the island’s £247 billion ($308 billion) funds industry, dispenses with the formal requirement for specific information such as a prospectus recognising the relationship between the fund manager and investors.

Under the new rules, fund registration may be completed within one business day. The manager will be responsible for providing warranties on the ability of the investors to assume loss.

The PIF, which can be either closed or open-ended, should contain no more than 50 legal or natural persons holding an economic interest in the fund, Guernsey Finance said in a statement. Where an agent is acting for a wider group of stakeholders, such as a discretionary investment manager or a trustee, that agent may be considered as one investor. 

“While there is a limit imposed on the number of investors in the PIF, no attempt has been made to limit the number of investors to whom the PIF might be marketed – a feature not available under comparable regimes,” it said.

The launch follows that of Guernsey’s Manager Led Product regime, designed in light of the Alternative Investment Fund Managers Directive (AIFMD), which places the regulatory burden on the manager and not the fund.

“The MLP regime, recently introduced by the GFSC, will be tremendously useful once the third country passport is extended to Guernsey,” said funds lawyer and Carey Olsen partner Ben Morgan. 

“In the meantime, this new PIF regime will be a fantastic boost for the Guernsey funds industry across all asset classes for the institutional investor fund market. The one-day fund registration turnaround by the GFSC will be a draw as will the absence of specific disclosure requirements.”