Jersey Funds Law Series: Jersey Listed Funds - Key Features

• What is a Jersey Listed Fund?

• Key features of a Jersey Listed Fund

• Ongoing requirements for Jersey Listed Funds

A Listed Fund meeting the criteria set out in the Guide which is issued by the JFSC, may be established using a streamlined authorisation process and authorised by the JFSC within three working days (subject to compliance with the Guide).

Key Features 

A Jersey Listed Fund is required to have the following features under the Guide:

Jersey company - a Jersey Listed Fund must be incorporated as a Jersey company.

Listed on a Recognised Stock Exchange - the fund's shares must be listed on one of the many stock exchanges or markets recognised by the JFSC, including the London Stock Exchange, the Alternative Investment Market (AIM) and The International Stock Exchange (TISE). 

Closed-ended - a Jersey Listed Fund must be closed-ended, meaning a fund which is not open for redemptions at the option of investors.

Collective Investment Fund - a Jersey Listed Fund constitutes a collective investment fund for the purposes of the Collective Investment Funds (Jersey) Law 1988 and so must comply with the JFSC’s Certified Funds Code of Practice more generally (in addition to the Guide). 

Directors - at least two Jersey resident directors with appropriate experience must be appointed to the board of the fund, and independent directors must form the majority of the board. 

Investment Manager or Advisor - must be of good standing, established and regulated (if appropriate) in an OECD member state or a jurisdiction with which the JFSC has entered into a memorandum of understanding, and satisfy the JFSC’s general principles of corporate governance by maintaining an adequate span of control over its business. 

Offering Document - a Jersey Listed Fund’s offering document must include a prescribed form of investment warning and contain all information necessary to enable investors to make an informed judgement about the merits of participating in the Listed Fund and the nature and levels of the risks accepted by making such a purchase. Jersey has certain prescribed content requirements, but usually these are similar in nature to those required by the relevant exchange and so do not impose a significant additional burden. 

Audit - An auditor must be appointed for a Jersey Listed Fund and audited accounts must be filed with the JFSC within seven months of the end of the Listed Fund’s financial year.

Administrator - every Jersey Listed Fund shall appoint an appropriately licensed Administrator with staff and a physical presence in Jersey. 

Custody - every Jersey Listed Fund must have adequate arrangements for the safe custody of the property of the fund including, if applicable, prime brokerage arrangements (although there is no requirement to appoint a custodian). Such arrangements shall be fully disclosed in the Offer Document. 

Fund service providers - any Jersey entity acting as a fund service provider to a Jersey Listed Fund must be registered under the Financial Services (Jersey) Law 1998, as amended, to conduct fund services business and be managed and operated in accordance with any applicable Codes of Practice.

Personal Questionnaires - directors and certain other officers of Jersey Listed Funds (and their fund service providers) are required to complete a questionnaire and submit this information to the JFSC to enable it to assess whether they are 'fit and proper'. 

Investors - there is no restriction on the number or type of investors in a Jersey Listed Fund beyond any required by the relevant stock exchange on which it is listed. 

Borrowing - there are no restrictions imposed upon the level of borrowing or gearing adopted by a Jersey Listed Fund, provided that the approach to borrowing or gearing is clearly disclosed in the Offer Document. 

AIFMD - Jersey Listed Funds are eligible to be marketed into the UK, EU or EEA in accordance with the AIFMD (or equivalent UK legislation) under the national private placement regime. A Jersey Listed Fund which will be marketed in the UK, EU or EEA (and its fund service providers) must also comply with the applicable sections of the JFSC’s AIF Code.

In addition, the Jersey Listed Fund will need to notify the JFSC under the Proceeds of Crime (Supervisory Bodies) (Jersey) Law 2008 that it intends to carry on certain Schedule 2 activities as a fund, as specified in the Proceeds of Crime (Jersey) Law 1999, and the JFSC will then issue notice that the Jersey Listed Fund is "deemed to be registered" in respect of such Schedule 2 activities.

Ongoing requirements

Jersey Listed Funds are subject to the following ongoing requirements under the Guide:

All material changes to information provided to the JFSC in connection with a Jersey Listed Fund shall be notified to the JFSC as soon as possible and in any event within 28 days of such change taking place.

The JFSC must be informed immediately if a Jersey Listed Fund is refused permission to be listed on a Recognised Stock Exchange or Market, or if such permission is revoked or if there is any other material event such as a suspension of trading in the securities of the Listed Fund or any investigation into the Listed Fund or any of its fund service providers.

Any change to a Jersey Listed Fund that would not meet the criteria set out in this Guide or that would breach any certificate condition applicable to that Listed Fund will require the prior consent of a duly authorised officer of the JFSC.

The Walkers Investment Funds & Corporate Law Practice Group in Jersey has significant experience in advising on the spectrum of Jersey funds. Please get in touch with any of the contacts listed below if you would like to learn more.

The information contained in this guide is necessarily brief and general in nature and does not constitute legal or taxation advice. Appropriate legal or other professional advice should be sought for any specific matter.