Private Equity Employee Loan Structure Analysis

Definitions:

"LCF Law" means The Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022.

"Notice" means the Guernsey Financial Services Commission's Notice with respect to the disapplication of the requirement to hold a licence under section 40 of the Lending, Credit and Finance (Bailiwick of Guernsey) Law, 2022.

1. LOANS TO EMPLOYEES IN ORDER TO FUND / LEVERAGE THEIR INVESTMENT INTO A FUND

This might be subject to both:

• Part II of the LCF Law, as credit business; and
• Part III of the LCF Law, as "lending" (and thereby constituting "financial firm business").

However, the following exemptions apply:

Part II

• Wholly or mainly outside that individual's trade, business or profession. Part II of the LCF Law applies where credit is extended for to a customer who is an individual acting for purposes wholly or mainly outside that individual's trade, business or profession. We consider that where a person employed by a fund