The Legal 500

New Security Interests (Jersey) Law: changes to Jersey law and market practice.

Matthew Swan and Bruce MacNeil - Ogier

Please see table through below link.

What legal form of vehicle is typically used for private equity funds formed in your jurisdiction?

It has been almost two years since the Securities and Investment Business Act, 2010 (‘SIBA’) in the British Virgin Islands (‘BVI’) was established – coming into eff ect on May 17th 2010.

The Jersey funds industry is anticipating the launch of new codes of practice for certified funds (the "Codes") by the Jersey Financial Services Commission (the "JFSC") on 2 April 2012 (the "Effective Date").

Jersey
Robert Milner, Robin Smith, Simon Marks and Alan Stevens - Carey Olsen

The Private Placement Fund (PPF) is a new type of regulated investment fund vehicle available in Jersey which has been specifically designed for the professional and institutional investor market.

Jersey
James Mulholland, Robert Milner and Daniel O’Connor - Carey Olsen

RETAIL FUNDS 1. What is the structure of the retail funds market? What have been the main trends over the last year? 

The Jersey Financial Services Commission has adopted a new policy
setting out a fast track, self-certification procedure for authorising a "Private
Placement Fund", being a fund:
• which is either established in Jersey or managed in Jersey
• which is closed ended
• whose units are offered to not more than fifty investors
• which only admits "sophisticated investors" or professional investors"
(see appendix)

From January 2012 a new streamlined regulatory authorisation process for the establishment of privately placed funds is available in Jersey.

The new private placement fund ("PPF") regime will add welcome speed and certainty to the regulation of Closed-ended Funds established or managed in Jersey, providing a cost-effective and non-intrusive regulatory environment for funds making offers to 50 or fewer professional or sophisticated investors worldwide. 

A. INVESTMENT FUNDS
1. Documents
1.1 Generally, the documents involved in the establishment of an investment fund in the Cayman Islands include the following:

The Mutual Funds (Amendment) Law, 2011 came in to effect on 22 December 2011 and provides for the regulation by the Cayman Islands Monetary Authority ("CIMA") of Cayman Islands master funds in fund structures which include a CIMA regulated feeder fund.

Many Jersey investment funds will be required to comply with new codes of practice from early 2012. The codes' purpose is to establish sound principles and to provide practical guidance in respect of the conduct of business by, and operation of, many types of Jersey funds.

This briefing was published in the Cayman Financial Review, Fourth Quarter 2011.

A trustee is duty bound to act strictly in accordance with the terms of the trust and within the parameters of the powers that it is granted. A trust instrument may provide a trustee with the power to adapt a trust structure to changing circumstances, thus ensuring that it does not fall out of step with convention, with beneficiaries' circumstances or with changes in the law but sometimes it does not.

In a judgment handed down this summer the Guernsey Court of Appeal has, in the case of Garnet Investments Limited v the Chief Officer of Customs and Excise, overturned the judgment of the Royal Court which quashed the decision of the Financial Intelligence Service (the "FIS") by which the FIS refused to grant consent to a Guernsey bank to transfer funds held by Garnet with the bank.

Following the recovery from the recent financial crisis, there has once again been a growing interest in special purpose acquisition vehicles (SPACs) and offshore jurisdictions such as Jersey, Guernsey, Cayman and the British Virgin Islands are increasingly being used for both the creation and ongoing business structure of such vehicles. These jurisdictions have proven to be ideal for this type of funding structure due to their flexibility and tax efficiency.

Impact Analysis for Jersey and Guernsey Investment Funds

After a protracted period of negotiation, the AIFM Directive was finally approved by the European Parliament on 11 November 2010.
The Directive is expected to be brought into force shortly and will regulate the activities of managers of alternative investment funds (“AIF Managers”) as follows:

Guernsey’s funds industry goes back over 30 years when the first retail unit trusts were established. At that time, Jersey had already established a firm foothold with these retail products. Lacking first mover advantage encouraged Guernsey to find alternative source of revenues from the funds sector and thus the Island opened its arms to alternative product types that weren’t necessarily acceptable in Jersey. From the late 1980’s onwards, Guernsey began to attract the then smaller closed ended fund market and many smaller management firms and start-up funds.

It has been estimated that there is European bank and bond debt with a combined value of up to €50-75 billion which is due to mature and come to market for refinancing over the next five years (Refinancing 2011: The Scramble to Refinance European Debt, Debtwire, March 2011). Many lenders are currently in the process of reviewing their loan books in advance of potential refinancings / restrucurings and obtaining security reviews analysing their position under existing structures.

When we look back over the last half century we can also learn about the time yet to come, says Anthony Dessain, Senior Partner

In this issue:
Cayman Court Examines Responsibilities
of Fund Directors . . . . . . . . . . . . . . . . . . . P2-7

Ogier Corporate Administration Limited (“OCAL”) is authorised by the UK Financial Services Authority (the “FSA”) to act as an ‘Operator’ to UK unregulated collective investment schemes (“UCISs”)

Most open ended funds in Asia are structured using a Cayman Islands company as the fund vehicle. The principal documents governing the contractual relationships between the investor and the fund are the offering memorandum, the subscription agreement and the memorandum and articles of association of the fund.

Jersey is a popular jurisdiction in which to incorporate companies for use on a wide range of transactions, including investment funds, private equity, structured finance and securitisation transactions as well as listings on the Alternative Investment Market of the London Stock Exchange.

Offshore jurisdictions such as the BVI, Cayman, Guernsey and Jersey are frequently chosen as the jurisdiction of domicile for SPACs.

Basics of a Jersey company
• Governed by Companies (Jersey) Law 1991, as amended ("CJL")
• Full capacity without long form memorandum
• Company can have:
- par value shares
- no par value shares
- shares denominated in any currency
- guarantee members
- unlimited members

Whilst the Beatles may have been content to "let it be", it is hoped that this article will highlight and prompt consideration of a little known provision in the Companies (Guernsey) Law, 2008 (as amended) ("the Law") that may have significant consequences for shareholders and investment companies alike.

Jersey introduced Cell Companies into its law in February 2006 Protected cell companies (PCCs) were first developed in Guernsey in the late 1990s. Originally to attract captive insurance work to Guernsey, they proved popular and versatile, and were soon found to be a useful vehicle in collective investment fund structures.

Registered persons that wish to outsource and delegate any part of their regulated functions must comply with policy and guidance issued by the Jersey Financial Services Commission. That policy and guidance was revised in May 2011 in order, in particular, to distinguish between outsourcing and delegation in a funds context and by functionaries of funds.

Following a period of turmoil in the financial markets, issuers have been viewing cash box structures as an attractive financing tool to facilitate share and convertible bond issues and to allow access to alternative sources of funding.

The establishment of, and raising of money by, closed-ended funds in Guernsey requires the consent of the Guernsey Financial Services Commission (the "Commission") pursuant to the provisions of the Control of Borrowing (Bailiwick of Guernsey) Ordinance, 1959 to 1989, as amended ("COBO").

This briefing provides a concise outline of the regulation of investment funds in Guernsey and an overview of the structures available in Guernsey and their tax treatment.

Guernsey is a 'European' offshore jurisdiction with a flexible regulatory regime which lends itself to the establishment of hedge funds.

A version of this briefing appeared on www.hedgeweek.com on 1 March 2011.

Most hedge funds do not give active consideration as to how they are to be liquidated in their constitutional documentation. Unfortunately this can have serious consequences for the fund. 

A version of this briefing appeared in The Lawyer Offshore Report on 2 May 2011.

From initially being seen as a threat, the ever-flexible Cayman is tackling the new regulatory environment head-on, says Robert Duggan.

Certain technical enhancements have recently been made to the Companies Law of the Cayman Islands by virtue of the Companies (Amendment) Law, 2011. Key changes are referenced below.

Historically, the most common structure used for private equity funds structured in the Cayman Islands was an exempted limited partnership. However, we have seen a shift recently towards structuring private equity funds as exempted companies.

A version of this briefing appeared in HFM Week Special Report, Cayman 2011, in April 2011.

A version of this briefing appeared in Cayman Funds 2011, published by Newton Media, April 2011.
It's a sad reflection on the recent state of the hedge fund industry that the term 'soft wind-down' has become one of the most frequently used in the last three years. Simon Palmer takes a look.

The Channel Islands Stock Exchange (CISX) has seen a
dramatic increase in the listing of quoted Eurobonds.
Many of these Eurobonds have been issued in
connection with private equity transactions. Typically the
debt issuing entity will be a UK tax resident company
formed in connection with a private equity funded
acquisition.

The investment funds industry in Jersey has achieved significant growth in recent years. Statistics show that as at 30 September 2010 there were £179 billion of assets under management in Jersey. The Island has developed into a leading jurisdiction for the establishment of investment funds and a large number of Jersey funds are listed on the London and other stock exchanges. Jersey and Guernsey established the Channel Islands Stock Exchange where special procedures exist to facilitate the listing of Jersey and Guernsey investment funds. (Please visit www.cisx.com for further information).

The Channel Islands Stock Exchange (CISX) offers a streamlined and highly responsive listing process for a wide range of securities and Issuers. Part of the CISX's growth has been driven by the withholding tax advantages (the "quoted Eurobond" exemption from the requirements to withhold for UK tax) obtained by listing certain types of debt securities on its Official List. This has been particularly attractive for UK and Irish corporates and the private equity industry. For additional information about listing on the CISX, please refer to our client Briefings Listing on the Channel Islands Stock Exchange and Listing Debt Securities on the Channel Islands Stock Exchange.

The Data Protection (Jersey) Law 2005 (the "Law") came into force on 1 December 2005. It sets out rules for the processing of personal data. Additional data protection provisions are set out in subordinate legislation. Broadly speaking, the processing of personal data includes obtaining, disclosing, recording, holding, using, erasing or destroying personal data. It applies to many paper records as well as those held on computer. The Law, therefore, has a significant impact on the way in which businesses manage their records.

The credit crunch has put pressure on a wide range of structures and, as a result, lenders, borrowers and other counterparties are looking more closely at the impact of possible insolvency proceedings. As Jersey companies have often been used in cross-border finance transactions, it is important to be aware of the differences between Jersey and English insolvency procedures for companies.

2010 in review

The Royal Court of Jersey recently held that Guernsey was the most appropriate forum for the resolution of certain issues in relation to a Jersey law Trust. This decision raises interesting questions in relation to trust jurisdiction clauses in Jersey trusts and Article 9 of the Trusts (Jersey) Law 1984 (as amended). This article examines this case and the implications.

The Special Trusts Alternative Regime or "STAR" is a creature of statute. It was introduced in the Cayman Islands by the STAR Law in 1997 but since then, has been incorporated in Part VIII of the Cayman Islands Trusts Law, appearing in the 2009 Revision at sections 95 to 109.

On 9 December 2010, the UK Government released new draft legislation aimed at tackling arrangements involving trusts and other vehicles to avoid, reduce or defer liabilities to income tax on rewards of an employment or to avoid restrictions on pensions tax relief.

Introduction This briefing is intended to provide a general overview of some of the factors to be considered by clients and their advisers in the establishment of a trust in BVI, Cayman, Guernsey, Jersey or New Zealand.

Representation of R M Talbot Estate - application by a trustee to vary a will of Jersey situate personal estate

Guernsey is once again the market leader for the number of companies listed on the markets of the London Stock Exchange (LSE).

On 13 December 2010 the Privy Council overturned the decision of the Cayman Islands Court of Appeal (the "CICA") in Culross Global SPC Limited v Strategic Turnaround Master Partnership Ltd [2010] UKPC 33.

Most hedge funds do not give active consideration as to how they are to be liquidated in their constitutional documentation. Unfortunately this can have serious consequences for the fund.

Directors are responsible for managing the business of their company and amongst the difficult problems that directors face in doing so is finding a path between diverse and sometimes conflicting interests that affect the company and the people interested in it.

During the lifetime of a company some of the most difficult problems that a director faces are encountered if the company is in financial difficulty: not yet unable to pay its bills and insolvent but with a possibility that it may get to that position. At that stage the decisions made by a director may affect not only the survival and future of the company but also the director's own position.

A version of this briefing features in "Getting the Deal Through - Insolvency and Restructuring 2010" published by Law Business Research.

Turning around Strategic Turnaround: Privy Council reverses decision of Cayman Islands Court of Appeal

A recent, and largely unheralded, change to the tipping off provisions is set to have a significant impact on financial services businesses in Guernsey.

Jersey has long enjoyed an excellent reputation as a jurisdiction in which to establish an investment fund. For Chinese fund promoters wanting to establish a fund and for Chinese investors investing in a fund, Jersey offers many advantages.

Taking security over shares, bank accounts, rights under contracts and other types of intangible property in Jersey is governed by the Security Interests (Jersey) Law 1983 (the 1983 Law). The 1983 Law is set to be replaced in late 2011 or in early 2012 by the Security Interests (Jersey) Law 201- (the new Law). The new Law provides Jersey with a modern, efficient regime for the creation and enforcement of security interests in intangible property.

The established view has long been that a trust is resident in the jurisdiction where the trustee is resident. This briefing note discusses recent international developments in the form of two recent cases, one in Canada and one in the UK, which have introduced concepts that we are more used to in the context of the determination of corporate residence.

Exemption from French 3% Real Estate Tax

This briefing is intended to provide a summary of some of the legal requirements and considerations applicable to the use of an offshore company for listing on the Alternative Investment Market (“AIM”). It is not, however, intended to be comprehensive in its scope and it is recommended that a client seeks legal advice on any proposed transaction prior to taking steps to implement it.

When setting up a joint venture involving parties from different countries, the international angle makes the choice of jurisdiction for the incorporation of the joint venture company (“JVC”) a crucial one.

This Briefing provides answers to some of the key questions which you may have regarding the need for you to make a will. It should be noted that this Briefing only applies to individuals who are domiciled in Jersey.

As the credit crunch continues to impact on the global economy and banking covenants come under greater pressure, lenders are increasingly examining the detail of their security packages in order to identify the various enforcement options open to them.

As financing transactions have become more sophisticated over the last decade, it has been common for parties to a transaction to agree in advance matters relating to:

Country Q&A

Country Q&A

The Channel Islands Stock Exchange, LBG (‘CISX’ or the ‘Exchange’) offers:

This Client Briefing has been prepared for the assistance of directors of companies listing “debt securities” as defined in Chapter 1 of the listing rules (the Listing Rules) of the Channel Islands Stock Exchange (the Exchange) under Chapter VIII of the Listing Rules.

The FSC releases the Public Funds Code to supplement SIBA and the Mutual Funds Regulations.

In the recent case of Bagus Investments v. Kastening , the Royal Court of Jersey signalled that the English claim of ‘knowing receipt’ might be known in Jersey law.

This Client Briefing has been prepared for the assistance of directors of companies listing “debt securities” as defined in Chapter 1 of the listing rules (the Listing Rules) of the Channel Islands Stock Exchange (the Exchange) under Chapter VIII of the Listing Rules.

The Channel Islands Stock Exchange, LBG (‘CISX’ or the ‘Exchange’) offers:

The Foundations (Jersey) Law 2009 (the "Law") came into force on 17 July 2009, allowing for the incorporation of foundations in Jersey.

The Securities Investment Business Law (2004 Revision) (the "Law") provides for the licensing and control of "securities investment business" (as defined below) carried on in, or from, the Cayman Islands. Under the Law, a person shall not carry on or purport to carry on securities investment business unless such person holds a licence granted under the Law or is exempt from holding a licence.

The Cayman Islands' Court of Appeal recently heard an appeal on the ability of a fund to suspend redemptions and the payment of redemption moneys.

There are many options available to promoters as to which domicile to choose for their fund and different factors, such as the preferences of seed investors or regulatory requirements may be important. This briefing highlights some of the different investment fund products available in Bahrain, the British Virgin Islands (‘BVI’), the Cayman Islands (‘Cayman’), Guernsey and Jersey and provides some background on each of those jurisdictions.

This Briefing covers the practical issues that are likely to be considered by UK advisers when structuring an AIM or LSE IPO using a Jersey or Guernsey based vehicle ("FloatCo").

Impact Analysis for Jersey and Guernsey Investment Fund

Liquidators were appointed over Fairfield Sentry Limited, Fairfield Sigma Limited and Fairfield Lambda Limited (together “the Funds”) by orders of the BVI High Court dated 21 July 2009, 21 July 2009 and 23 April 2009 respectively.

In the Matter of DD [2010] JRC 193, 21 October 2010 Commissioner Clyde-Smith, and Jurats Le Breton and Morgan This case concerned an application by the Settlor and New Trustee ("DD") to the Royal Court, for rectification of the trust deed and an associated declaration of trust or in the alternative that the trust be set aside on the basis of mistake.

What is a Will? A Will is a legal document in which you set out how you would like your estate to be dealt with after your death. It contains the names of the individuals or institutions whom you want to receive your assets.

Court declines to order disclosure to beneficiaries correspondence between other beneficiaries and trustee

The creation of security over intangible movables under Jersey law is currently governed by the Security Interests (Jersey) Law 1983. After a period of consultation, the new Security Interests (Jersey) Law is in a close-to-final form. The new Law will add certainty and flexibility at a time when economic conditions have led to a greater focus on protection of collateral.

This case concerned five applications involving the Mischca Trust. The first application (the “Butterfield Application”) was made by the trustee of the Mischca Trust to request confirmation from the Court that the setting up of the International Fund for Arts and Sciences (‘IFAS’) charitable trust by them was lawful.

Court declines to order disclosure to beneficiaries correspondence between other beneficiaries and trustee

The claimants are the joint trustees (the “Trustees”) of a Jersey property unit trust (the “Trust”), formed as a vehicle for holding real property in the United Kingdom (the “Property”).

In the recent case of Mirpuri vs Bank of India ([2010] JRC 129), the Royal Court of Jersey was asked to consider what powers a secured party could exercise to protect its security. In addition, the court made a number of comments on variation of contract, estoppel and mitigation of loss.

This case concerned five applications involving theMischca Trust. The first application (the “ButterfieldApplication”) was made by the trustee of the MischcaTrust to request confirmation from the Court that thesetting up of the International Fund for Arts and Sciences(‘IFAS’) charitable trust by them was lawful.  

An eye onsecurity 

The Channel Islands Stock Exchange (CISX) began operations in October 1998. It is based in St Peter Port, Guernsey and provides a listing facility and screen-based trading. It is within an OECD jurisdiction and in the European time zone. The CISX’s mission is to be the premier offshore stock exchange in the European time zone and the exchange of choice for the listing of investment funds, debt instruments and the shares of companies.

In this recent case, the Grand Court held that the Hastings Bass principle applied, not just to the actions and decisions of a trustee, but also to the actions and decisions of directors of a company owned by the Ta- Ming Wang Trust (the “Trust”), in declaring dividends, at the instance of the trustee in favour of the trustee; but that, on the available evidence, the decision of the directors could not be impugned.

The case concerned an application for directions made by the corporate trustee (the “Trustee”) in relation to the underlying assets of three Jersey trusts: the AE Settlement, the CE Settlement and the IE Settlement (together, the “Trusts”).

This briefing is intended to provide a general overview of some of the factors to be considered by clients and their advisers in the establishment of a trust in BVI, Cayman, Guernsey or Jersey.

The British Virgin Island’s Commercial Court has recently delivered a decision in Western Union International Limited v Reserve International Liquidity Fund Ltd which addresses the issue of when during the redemption process a redeeming investor becomes a creditor of the fund and is therefore entitled to apply for the appointment of a liquidator.

With the enactment of the Securities and Investment Business Act, 2010 (“SIBA”) in the BVI, which comes into force on 17 May 2010, the Mutual Funds Act, 1996, the statute which has regulated the BVI funds industry for more than a decade will be repealed and replaced by SIBA (of which Part III relates to funds) and its underlying secondary legislation, the Mutual Funds Regulations, 2010 (the “Mutual Funds Regulations”) and the Public Funds Code.

With the enactment of the Securities and Investment Business Act, 2010 (“SIBA”) in the BVI, which came into force on 17 May 2010, the regulation of the BVI’s financial services industry has undergone a number of significant changes. These changes may affect your BVI entities.

The ETC market is one of the fastest growing investment segments in the Exchange Traded Product market. Jersey remains a popular jurisdiction for the creation of ETC issuance vehicles and this briefing outlines some of the benefits of using Jersey and Ogier to establish ETC structures.

2009 saw the revival of the convertible bond market in Europe and commentators expect continued activity in this market in 2010 as corporates continue to diversify sources of funding away from bank lending coupled with strong investor demand.

National interests play a distinct part in application of the UNCITRAL model law on cross-border insolvency.

This briefing document explains how a United Kingdom public limited company (‘PLC’), which is listed on the main list of the London Stock Exchange or on AIM, may use a Jersey company in a ‘cash box’ transaction where PLC is raising money either through a placing of its shares, a rights issue or where a convertible bond is issued.

The Chinese State Administration of Taxation (“SAT”) issued Circular [2009] No. 698 (“Circular 698”) on 10 December 2009. Circular 698 addresses various tax issues on equity transfers by non-Chinese tax resident enterprises. It applies retroactively from 1 January 2008 and covers direct and indirect sales by non-Chinese tax resident enterprises of unlisted shares of Chinese tax resident enterprises.

Although Guernsey has a distinctive French-Norman legal heritage, its 20th century corporate and commercial laws have largely been based on equivalent UK legislation. Consequently, much of Guernsey's legislation in this area will be familiar to those used to dealing with the UK or other common law systems. Indeed, the decisions of the courts of the United Kingdom, Australia and other Commonwealth countries are frequently relied upon in the Guernsey court

The settlor applied to court to set aside the Lochmore Trust (the “Trust”) on the grounds of the settlor’s mistake, and all beneficiaries of the Trust had confirmed their consent to the application. Tax advice that the settlor received suggested that shares held by Lochmore (as nominees for the settlor) (the “Shares”) ought to be contributed to the Trust for CGT savings, which contribution being made by way of sale with the price outstanding as a loan rather than a gift into the trust, to avoid an IHT charge at 20%, as the settlor was deemed to be domiciled in the UK for IHT purposes.

After much anticipation, the British Virgin Islands (“BVI”) enacted the Securities and Investment Business Act, 2010 on 12 April 2010 (“SIBA”). SIBA, which came into force on 17 May 2010 (with the exception of the provisions relating to public issues of securities), takes into full account current and emerging international standards of regulation as they relate to the regulation and administration of investment funds (including hedge funds) and entities conducting investment or securities business. It represents an extremely important step for the ongoing development and growing sophistication of the financial services sector within the BVI. It also provides a user friendly statute, in tune with the current regulatory environment, which will complement the BVI Business Companies Act, 2004 and the Insolvency Act, 2003.

The Chinese State Administration of Taxation (“SAT”) issued Circular [2009] No. 698 (“Circular 698”) on 10 December 2009. Circular 698 addresses various tax issues on equity transfers by non-Chinese tax resident enterprises. It applies retroactively from 1 January 2008 and covers direct and indirect sales by non-Chinese tax resident enterprises of unlisted shares of Chinese tax resident enterprises.

This is the latest decision of the Royal Court in relation to an application by a UK creditor (a bank) for a letter of request to be issued to the English High Court requesting that an administration order be made in respect of a Jersey company.

Jersey is the only offshore centre to place in the top 20 of global finance centres in a leading industry listing.

Figures issued today show that the value of investment funds in Guernsey increased by £2.7bn (1.5%) during the final three months of last year.

On 23 December 2009 the Jersey Financial Services Commission (“JFSC”) published an additional trust company business section (the “Section”) to its Handbook for the Prevention and Detection of Money Laundering and the Financing of Terrorism (the “Handbook”).

Current developments in the global investment funds legal and regulatory environment

The Ogier Group is the world’s largest offshore law firm with a presence in nine jurisdictions around the world and employing over 800 professional and support staff including more than 220 lawyers and 300 professional administrators.

Jersey is one of the premier offshore jurisdictions for the establishment of investment funds and is highly regarded for the quality of its regulatory regime and its legal and service providers. Investment funds contribute significantly to Jersey's finance industry and a variety of innovative products and structures is available to suit all types of investor and promoter. This Briefing provides an outline description of the range of investment funds which can be established in Jersey and the regulatory controls applied to such funds by the Jersey Financial Services Commission (the "Commission").

The Collective Investment Funds (Unregulated Funds) (Amendment No. 2) (Jersey) Order 2009 came into force on 23 February 2009. The Order amends the Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008 to specify which London Stock Exchange markets are acceptable markets for an Unregulated Exchange Traded Fund.

Global issuance of collateralised debt obligations and synthetic equivalents in 2007 reached US$269 billion but by the end of 2008 had dropped to US$71 billion (source: Creditflux). Recent market activity suggests that a growing number of investment finance vehicles are being structured not as CDOs issuing rated debt, but as hybrid investment funds. A combination of the various factors summarised below is expected to result in permanent changes to the structure of the investment capital markets.

The Foundations (Jersey) Law 2009 (the "Law") came into effect on 17 July 2009.

A recent decision of the British Virgin Islands High Court in SV Special Situations Fund Limited (SV) v Headstart Class F Holdings Limited (Headstart) should be treated by investors and hedge fund managers as a cautionary tale to consider carefully the terms of any side letters.

The Organisation for Economic Cooperation and Development (“OECD”) at the G-20 Summit in April this year developed a three-tiered classification for offshore financial centres according to an internationally agreed standard. An offshore financial centre may be classified as ‘white’, ‘grey’ or ‘black’ based on the number of Tax Information Exchange Agreements (“TIEA”s) entered into. A classification of ‘white’, the highest distinction denoting substantially implemented agreed tax standards, requires an offshore financial centre to have entered into a minimum of 12 TIEAs.

Jersey, the largest of the Channel Islands, is established as a leading international finance centre, with an enviable reputation for stability, integrity, quality of service, professionalism and high standards of regulation. Jersey is, however, exposed to the same risks faced by all financial centres: its reputation may be undermined and its financial services subverted by the activities of money launderers and organised crime generally.

This English law case was an application by Close Trustees (Switzerland) SA and Close Brothers Trust Company (the “Trustees”) in respect of a trust where the life tenant was entitled to the income. After the life tenant’s death the capital would be held for the benefit of her children. The life tenant was seeking damages and compensation from both the investment management companies and the Trustees and Protector for losses in respect of the performance of investments held in the trust through the Californian Courts. The Trustees sought the approval of the Court for the retention of a proportion of the income which would otherwise be paid out to the life tenant to ensure that funds were available to reimburse the Trustees’ legal costs. The case did not consider whether the Trustees were entitled to be reimbursed for their legal costs as this would depend upon the outcome of the Californian case, but just whether the retention was permissible given the effect that this would have on the life tenant’s income.

The Foundations (Jersey) Law 2009 (the "Law") will come into force on 17 July 2009, allowing for the incorporation of foundations in Jersey.

The inclusion, following the Group of Twenty ("G20") summit in London in April 2009, of the Channel Island financial centres of both Jersey and Guernsey on the "white list" of jurisdictions that have substantially implemented the internationally agreed standard for the exchange of tax information is an acknowledgement that Jersey and Guernsey are cooperative, responsible and well regulated, low tax international financial centres meeting the highest standards of transparency and regulation.

There have been four recent Jersey cases which have helped to develop and clarify the law applicable to situations where trustees exercise a discretion which is later found to have had adverse and unintended consequences, and where the trustees would have acted differently had they taken relevant factors into account, or had they not taken irrelevant factors into account.

The draft Foundations (Jersey) Law 200- (the "Law") has been approved by the Privy Council and is expected to be brought into force during July 2009. The Law will allow for the establishment of Jersey foundations, thereby adding significantly to the structuring opportunities available to clients selecting Jersey as a jurisdiction for private wealth management purposes.

The inclusion, following the Group of Twenty ("G20") summit in London in April 2009, of the Channel Island financial centres of both Jersey and Guernsey on the "white list" of jurisdictions that have substantially implemented the internationally agreed standard for the exchange of tax information is an acknowledgement that Jersey and Guernsey are cooperative, responsible and well regulated, low tax international financial centres meeting the highest standards of transparency and regulation.

The inclusion, following the Group of Twenty ("G20") summit in London in April 2000, of the Channel Island financial centres of both Jersey and Guernsey on the "white list" of jurisdictions that have substantially implemented the internationally agreed standard for the exchange of tax information is an acknowledgement that Jersey and Guernsey are cooperative, responsible and well regulated, low tax international financial centres meeting the highest standards of transparency and regulation.

The U.S. Government has asserted jurisdiction over a non U.S. person for the first time and levied the largest ever penalty for violations of U.S. sanctions.

On January 9th 2009 the British Bank Lloyds TSB entered into a deferred prosecution agreement with the U.S. Department of Justice (DOJ) and the New York County District Attorney’s office (NYDA) concerning the bank’s admitted non-compliance with the OFAC sanctions regime pertaining to Iran and Sudan.

Foundations to be established under the Foundations (Jersey) Law 200[-] (the “Law”) are vehicles for holding assets. They will be incorporated and therefore have separate legal personality. Foundations must be established with one or more objects. With the sole caveat that the objects must be lawful, they can be charitable, non-charitable or a mixture of both. Permissible objects might include, for example, benefiting a particular person or class of persons or carrying out a specific purpose or holding a particular asset.

Foundations are vehicles for holding assets. The Foundations (Jersey) Law (the “Law”) will now permit Foundations to be created under the law of Jersey.

The Islamic finance sector has flourished in recent years and has grown from being a specialised niche to a multi-billion dollar global mainstream industry. It has proved dynamic and innovative and has provided an increasing range of sophisticated products. It now offers a real alternative to more established financing techniques.

The sector offers products designed to meet the needs of Islamic investors but the appeal of such investments has proved to be significantly wider as investors globally look to invest in products expressly designed to meet the ethical requirements of Shari'a law.

Since 2003, the Jersey Financial Services Commission (the "Commission"), has been implementing an initiative to integrate a number of pre-existing regulatory laws into the Financial Services (Jersey) Law 1998 (the "FSJ Law"). By providing a "one-stop shop" for the legislation within which it operates, the Commission hopes that its administrative and communication roles will be simplified and that it will be easier for the finance industry to understand and comply with the legal framework.

An article published in the Observer newspaper on 14 December 2008  contained the utterly misconceived assertion that ‘The financial crisis began with the collapse of the structured investment vehicles, which accountants and lawyers working offshore put together’. The article went on, rather brazenly, to state that ‘transparency and openness’ are ‘virtues that the offshore banking industry hates with a passion’. Those statements are made without reference to any empirical evidence. The article could simply and accurately be regarded as a misguided ramble by someone with little knowledge of his chosen subject, were it not for the fact that it is another example of the misplaced but increasing hostility to offshore financial centres. That hostility has certainly intensified as a result of the global financial crisis. We have seen politicians on both sides of the Atlantic applying pressure; the Stop Tax Haven Abuse Bill in the US Senate and, in the UK, the announcement in the pre budget report of a review of the Crown Dependencies and Overseas Territories  are further examples to which the EU’s indirectly discriminatory White list , President Sarkozy’s recent call for a ‘crack down’ on tax havens  and Joseph Stiglitz call for them to be ‘shut down’  can all be added.

This Briefing relates to the use of Jersey companies as special purpose vehicles ("SPVs") specifically established for the purposes of securitisations and other structured financing transactions.

Jersey is one of the premier offshore jurisdictions for the establishment of investment funds and is highly regarded for the quality of its regulatory regime and its legal and service providers. Investment funds contribute significantly to Jersey's finance industry and a variety of innovative products and structures is available to suit all types of investor and promoter. This Briefing provides an outline description of the range of investment funds which can be established in Jersey and the regulatory controls applied to such funds by the Jersey Financial Services Commission (the "Commission").

The text of this Briefing is limited in its application to Jersey companies. This is a complex area of law not easily summarised into short form. It follows that this Briefing should in no way be regarded as exhaustive.

In accepting any directorship, a director will automatically assume a host of duties and personal obligations arising from specific legislation, common law and generally accepted standards of corporate governance. Drawing these duties and obligations together is not always an easy task, but notwithstanding this, the consequences of failure on individual directors can be severe. Recent high profile cases against individual directors (for example, the claims commenced by Equitable Life in 2005 against fifteen former directors in the sum of £3.7 billion) evidence that the stakes for individual directors have never been higher. It is therefore of paramount importance that individual directors fully appreciate and identify the risks associated with being a director and consider how these risks can best be mitigated.

This Briefing outlines the distinctions between public and private companies in Jersey. The Companies (Jersey) Law 1991, as amended (the "1991 Law") provides for companies incorporated in Jersey to be either public or private. This Briefing reflects the recent changes made in relation to public and private Jersey companies by the Companies (Amendment No. 9) (Jersey) Law 2008, of which the majority of provisions came into force on 27 June 2008 and the remainder on 1 August 2008.

The success of the final product is dependant on making many decisions. Whether they are; determining the target market, determining what type of investment fund is required, which compliance and regulatory regime will best suit the circumstances, establishing distribution channels, or introducing systems and procedures to support the operation of the fund, Ogier is in a position to assist you from the outset.

The success of the final product is dependant on making many decisions. Whether they are; determining the target market, determining what type of investment fund is required, which compliance and regulatory regime will best suit the circumstances, establishing distribution channels, or introducing systems and procedures to support the operation of the fund, Ogier is in a position to assist you from the outset.

This Briefing provides answers to some of the key questions which you may have regarding the need for you to make a will. It should be noted that this Briefing only applies to individuals who are domiciled in Jersey.

The Islamic finance sector has flourished in recent years and has grown from being a specialised niche to a multi-billion dollar global mainstream industry. It has proved dynamic and innovative and has provided an increasing range of sophisticated products. It now offers a real alternative to more established financing techniques.

Funds established in Jersey are generally subject to regulation by the Jersey Financial Services Commission ("JFSC"). The degree of regulation varies depending upon the type of fund. Investment funds which are offered to the public, for example, are regulated pursuant to the Collective Investment Funds (Jersey) Law 1988, as amended, (the "CIF Law") and must obtain a certificate from the JFSC, which will only be granted following an approval process involving scrutiny of all the documentation and key parties associated with the fund. Funds offered to more sophisticated investors, such as professional investor regulated schemes, Jersey expert funds or listed funds, are subject to lighter regulation.

This is the first occasion on which a Jersey law trust has been set aside on the ground of mistake. Last year in the Matter of the Representation of DSL(R) Limited, the Royal Court, for the first time, set aside an English Law trust over which it had jurisdiction on this ground.

The role of Jersey as a financial centre means that on occasions there will be a requirement for a foreign liquidator or an office-holder under bankruptcy legislation to obtain information or documentation from persons or companies located in the Island. There have been a series of recent court decisions establishing the appropriate levels of co-operation with other jurisdictions.

Private equity and venture capital funds are typically established though the medium of limited partnerships and this Briefing therefore focuses upon the principal features, formation, regulation and taxation of limited partnerships established in Jersey for such purposes.

The success of the final product is dependant on making many decisions. Whether they are; determining the target market, determining what type of investment fund is required, which compliance and regulatory regime will best suit the circumstances, establishing distribution channels, or introducing systems and procedures to support the operation of the fund, Ogier is in a position to assist you from the outset.

The last couple of years have witnessed a formidable increase in the number of securitisation transactions completed in the British Virgin Islands, and there is much hope that the market share of the jurisdiction in the industry of offshore securitisations and structure finance transactions will continue to growth as it did its market share in the global investment funds industry.

This memorandum explains the regulatory classification for collective investment funds established in Jersey qualifying as 'expert funds'.

This Briefing explains a new regulatory classification for listed investment funds established in Jersey, which was introduced by the Jersey Financial Services Commission (the "Commission") with effect from 9 January 2007.

Many offshore financing and lending transactions involve the creation of charges over collateral which is situate in Jersey.

Potential settlors who may be considering placing assets into a trust tend to be concerned to ensure that there is an appropriate control over the manner in which the trustee administers the trust – naturally the law and regulatory requirements provide some control, but where a settlor seeks to ensure that his individual concerns and wishes are reflected in the administration of a trust, trust law has developed the role of the Protector, which is, or at least has been, an important role.

A key part of the recent efforts to promote Jersey's funds industry was the introduction of the Expert Funds Guide in 2005, which offers both speed and regulatory flexibility for those wishing to domicile funds in Jersey, for "expert" investors. The regime has been very successful, and has contributed to a period of accelerated growth in the Jersey funds sector. This was closely followed by the introduction of the Non-Domiciled Funds Guide - designed to make the administration of funds from Jersey simpler and more efficient.

The Banking Business (Amendment No. 5) (Jersey) Law 2007 came into force on 9 March 2007.

The Jersey Financial Services Commission (the “Commission”) has signed a Memorandum of Understanding with the Cyprus Securities and Exchange Commission.

In August, the Commission issued a Consultation Paper entitled “Basel II in Jersey: Local Implementation Issues”. The new Basel Capital Accord (“Basel II”) establishes revised methodology for measuring the risks that a bank faces and for calculating the minimum level of capital required to protect against their potential impact.

In August, the Commission issued a Consultation Paper entitled “Amendments to the Banking Business (Jersey) Law 1991”. A number of amendments are proposed, the majority of which mirror equivalent measures already enshrined in the Financial Services (Jersey) Law 1998 and the Insurance Business (Jersey) Law 1996.

In September, the Commission issued a joint press release with the Cayman Islands Monetary Authority announcing that they had both signed a memorandum of understanding (“MOU”) which came into effect on 21 August 2006.

In July, the Jersey Financial Services Commission (the “Commission”) issued Update No. 11 to its Anti-Money Laundering Guidance Notes. The Update revises Appendix D of the Guidance Notes to add the Cayman Islands to the list of countries and territories considered to have equivalent anti-money laundering frameworks in place and to set out more clearly the Commission’s expectations when a financial services business places reliance on a financial institution in an equivalent country or territory to have undertaken identification procedures.

Maintaining Momentum - The New Listed Fund Regime and Future Developments

Published in the Jersey Evening Post Finance in Law Supplement - March 2007

The investment funds sector in Jersey has experienced considerable success in recent years. The Island is well on its way to setting itself apart from other offshore centres as a first choice domicile for alternative investment funds and as a leading administration centre.

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