Suspended Funds

On 30 September 2022 the Commission released a paper clarifying the impact of the changes to the POI Law on suspended funds. A copy of the paper can be found?here.

Prior to the revision of laws, registered and authorised schemes that were coming to the end of their lives and being wound up could apply for the authorisation or registration of the scheme to be suspended. This had the effect of removing any rule requirements previously applicable to the scheme and usually the scheme had no further ongoing obligations other than to notify the Commission when the scheme had been wound up.

The Commission has indicated that whilst it will continue to accept requests to suspend scheme authorisations or registrations they have sought to clarify that under the amended Law suspended schemes will remain authorised or registered for the purposes of the Enforcement Law and the POI Law.

This means that all suspended schemes (crucially not just those suspended from hereon in but all suspended schemes), and their licensed service providers will be subject to all applicable rules and regulations, including the Handbook. This has the effect that the submission of audited financial statements and annual returns will be required and, from 2024, annual fees.

For administrators with schemes that have been suspended for significant periods of time the re-establishment of regulatory obligations may cause administrative difficulties and we would suggest firms consider the impact of this requirement as soon as possible.?

The Commission has indicated that it may accept derogations or modifications of rule obligations, including the?requirement to submit audited accounts, where:

(a)?compliance with the requirements in question would be unduly burdensome for the licensee or applicant having regard to the benefit which compliance would confer on investors; and?

(b)?the exercise of those powers will not result in any undue risk to investors.?

Advisory Services (Guernsey) Limited are well placed to assist fund administrators and fund boards review their ongoing obligations, assess the appropriateness of a derogation request and assist firms making those applications to the Commission.

Please contact us should you wish to discuss further:

Dawn Sealey: [email protected]

Mel Torode: [email protected]