Jersey launches new Expert Funds regime
The Jersey Financial Services Commission introduced ‘Expert Funds’ designed to streamline the process for authorising and establishing new funds. Applications to establish Expert Funds were invited from 4 February.
Expert Funds are designed as flexible investment vehicles that can take any form recognised under the laws of Jersey. They may be open-ended or closed-ended. There are no investment or gearing restrictions, and requirements in respect of custody or prime brokerage arrangements are flexible. Expert Funds are intended to be suitable for hedge funds and other innovative products. They will only be offered to investors with the expertise and resources to accept any extra degree of risk involved. Qualifying investors will include professional and institutional investors, investors with a net worth or joint net worth above US$1m and investors making an investment of above US$100,000.
Expert Funds will be capable of being established in days. Under the proposals, “authorised functionaries” in Jersey – such as administrators, fund managers and trustees – will be permitted to self-certify Expert Funds which meet set criteria.
Anguilla Financial Services Commission comes into operation
The Anguilla Financial Services Commission (AFSC) commenced operations on 2 February. It replaces the Financial Services Department of the Anguillian Ministry of Finance as recommended by the review of financial services regulation conducted by KPMG in 2000.
The AFSC was brought into being by the Financial Services Commission Act, which was passed in November. The AFSC’s functions under the Act include licensing and supervision, compliance with anti-money laundering legislation, monitoring of financial services, reviewing financial services legislation and making recommendations for new legislation, encouraging high professional standards, maintaining contact with appropriate foreign regulatory authorities and providing information on matters of financial services.
Bills to be brought forward for enactment in the first quarter of 2004 include:
an Insurance Act to govern the conduct of domestic and captive insurance, insurance agents, brokers and managers;
a Mutual Funds Act to provide for the registration and recognition of professional, private and public funds;
a Protected Cell Companies Act to provide for companies to apply to operate protected cell structures.
The Commission said it will be reviewing the Trusts Ordinance 1994 and will consider drafting a new Limited Liability Partnership Act. It will also decide on a policy for the immobilisation of bearer shares.
John Lawrence has been appointed Director of the Commission.
Hong Kong reviews exemption for offshore funds
The government has put out for consultation a paper on proposed amendments to exempt offshore funds from profits tax. Offshore funds are currently subject to a 17% profits tax. The proposal would exempt both fund and non-fund entities that reside outside Hong Kong from tax on income from transactions conducted inside Hong Kong through a broker or investment advisor. Anti-avoidance measures are also proposed.
The exemption proposal was included as part of the 2003-2004 budget, presented last March, and is intended to bring Hong Kong into line with other international financial centres.
EU censures six states over money laundering measures
The European Commission has sent formal requests to Italy, Portugal, Greece, Sweden, Luxembourg and France to implement the Second Anti-Money Laundering Directive. Adopted on 4 December 2001, it was due to be in force across all member states by 15 June 2003. The Directive commits member states to combat laundering of the proceeds of a wide range of serious crime and extends the coverage of the First Directive from the financial sector to a series of non-financial activities and professions. These include external accountants and auditors, real estate agents, notaries, lawyers, dealers in high value goods and auctioneers
None of the six listed states has yet notified the Commission of their measures to embody the Directive in national law. The Commission's requests will take the form of reasoned opinions. In the absence of a satisfactory response, the Commission may refer the states to the EU Court of Justice. Only Denmark, Germany, Finland and the Netherlands met the deadline to adopt the EU directive's changes into their laws. Ireland and Spain did so late. After an initial letter sent in July from the Commission, Austria and the UK notified it of plans for implementation, and Belgium has published a new law.
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