Tatiana Collins
Partner
Jersey
The changes modernise the Control of Borrowing regime by significantly narrowing when regulatory consents are required from the Jersey Financial Services Commission (the JFSC) and simplifying the position for professional, institutional and private capital structures.
This advisory summarises the key changes and their practical impact.
Overview
The Amendment Order primarily amends the Control of Borrowing (Jersey) Order 1958 (COBO), while also making consequential changes to the Professional Investor Regulated Scheme (PIRS) and Special Purpose Investment Business (SPIB) exemptions, which relate to Jersey's prudential financial services regime. The overall policy objective is clear. Regulatory oversight is now focused largely on retail investors, with unnecessary regulation being removed from professional and private arrangements.Key changes
Introduction of a retail investor concept
A new definition of 'retail investor' has been introduced for the first time. A retail investor is essentially any investor who is not a professional or sophisticated investor.
In broad terms, the following are not retail investors:
- persons whose business involves acquiring or managing investments;
- regulated fund services and investment businesses (and equivalent overseas firms);
- financially sophisticated employees, directors and partners of such firms;
- entities wholly owned by such persons;
- professional, eligible or expert investors under JFSC fund guides; and
- persons with substantively equivalent status.
Most institutional investors, family offices, regulated firms and professional structures fall outside the retail category.
Prospectus requirements significantly narrowed
Prospectus requirements now apply only where:
- the issuer is not incorporated or established in Jersey, and
- the offer is circulated to retail investors in Jersey.
Offers made:
- exclusively to professional or sophisticated investors, or
- by Jersey‑incorporated entities,
are generally outside scope.
Similar changes for partnerships, LLPs and LLCs
Equivalent limitations now apply to:
- limited partnerships,
- limited liability partnerships, and
- limited liability companies.
Consent is required only where non‑Jersey issuers make offers to retail investors in Jersey.
Private investment structures using Jersey vehicles - especially at general partner, manager or holding‑company level - can proceed with significantly fewer regulatory touchpoints.
New exemption for non‑investment fund structures
A major simplification has been introduced for:
- non‑Jersey domiciled entities that are not investment funds, and
- Jersey unit trust schemes that are not investment.
No consent is required for these structures.
An 'investment fund' is tightly defined by reference to Jersey fund legislation and substantively equivalent schemes elsewhere.
This change removes Jersey consents from a wide range of:
- unit trusts,
- SPVs,
- holding companies,
- joint venture structures, and
- private investment arrangements
that are not funds and were never intended to be regulated as such.
Expansion of PIRS and SPIB exemptions
A key change is the removal of the concept of a 'relevant consent' from the PIRS and SPIB exemptions.
From 13 April 2026, service providers may rely on the PIRS and SPIB exemptions without the need for any Control of Borrowing consent, and those exemptions are no longer limited to entities previously listed or approved under COBO.
Why this matters
The removal of the consent requirement materially broadens the availability of the PIRS and SPIB exemptions, particularly for:
- non‑Jersey joint ventures and investment arrangements;
- private wealth and family office structures;
- segregated managed accounts and actively managed certificate programmes; and
- structures previously outside the Control of Borrowing framework, including discretionary trusts.
In practical terms, a Jersey manager or adviser can now manage or advise segregated accounts or portfolios directly, without the client first needing to establish an SPV with a COBO consent, provided the client qualifies as a 'professional investor'. The exemptions can therefore be relied upon more flexibly, without reference to historic COBO‑driven constraints.
Why the expanded professional investor definition matters
The definition of 'professional investor' has recently been expanded and is now deliberately broad. It includes, among others:
- individuals with net assets exceeding USD 1 million (excluding their primary residence);
- corporate vehicles, trusts or partnerships with assets available for investment of more than USD 1 million;
- regulated investment businesses and their associates;
- financially sophisticated directors, partners, employees, consultants and shareholders of the manager or adviser; and
- a wide range of private wealth, family office and co‑investment arrangements.
As a result, a significant proportion of HNWIs, family offices and professional clients will now fall comfortably within scope, making Jersey an increasingly attractive jurisdiction for managed account and certificate‑based investment platforms.
Existing consents will fall away automatically
Control of Borrowing consents granted before 13 April 2026 in respect of:
- a non‑Jersey entity that is not an investment fund, or
- a non‑fund Jersey unit trust,
will automatically cease to have effect from that date. This does not affect the validity of anything done in reliance on these consents, but rather that the requirement to comply with conditions attaching to consents or notify the JFSC of changes under the consents is no longer required.
What this means for you
These reforms are good news for most users of Jersey structures:
- fewer regulatory consents;
- faster execution for professional and private capital transactions;
- greater certainty for private structures;
- simplified position for service providers relying on PIRS / SPIB exemptions; and
- Jersey remains robust but proportionate for the modern funds and finance markets.
Next steps
This is the start of a phased approach to the repeal of the Control of Borrowing framework. The Amendment Order effectively switches off certain parts of COBO, streamlining processes and removing several consent requirements, as noted above. There will be more changes to come, which will be of direct relevance to issuers of digital assets in Jersey and to the circulation of offers to retail investors in Jersey for non‑Jersey domiciled funds.
In the meantime, we recommend that clients:
- review any existing COBO consents to confirm whether they will fall away automatically as it may be that conditions attaching to COBO consents no longer need to be complied with; and
- consider whether future offerings or structures may now proceed without Jersey consent requirements.
We would be happy to discuss how these changes apply to your specific structures or upcoming transactions.
