Channel Islands Funds Quarterly Legal And Regulatory Update Q3 2018: 1 July - 30 September 2018

1 Jersey Developments

1.1 Limited Liability Companies arrive in Jersey

On 11 September 2018, the Draft Limited Liability Companies (Jersey) Law (the LLC Law) was adopted by the States of Jersey paving the way for limited liability companies (LLCs) to be established in Jersey. The LLC Law will now go before the UK Privy Council for final review and approval. Regulations to bring the new law into force are currently being progressed by the States.

The LLC Law largely mirrors the Delaware model. LLCs offer the limited liability protection of a company and the flexibility and privacy of a partnership in one vehicle. They have become increasingly popular vehicles globally and particularly in the US. We expect to see a reflection of this trend in Jersey following the implementation of the LLC Law.

Please find a link to our briefing here.

1.2 A new law for Jersey Limited Liability Partnerships

The Limited Liability Partnerships (Jersey) Law 2017 (LLP Law), which replaces the Limited Liability Partnerships (Jersey) Law 1997 (1997 Law), came into force in its entirety on 1 August 2018, together with the following Regulations relating to limited liability partnerships (LLPs):

The Limited Liability Partnerships (Amendment of Law) (Jersey) Regulations 2018 provides for transitional arrangements to the new LLP Law for all LLPs that exist under the old framework; and The Limited Liability Partnerships (Dissolution and Winding Up) (Jersey) Regulations sets out the circumstances in which an LLP may be dissolved and the procedures that should be followed to wind up an LLP in both solvent and insolvent situations. Importantly, LLPs established under the 1997 Law are required to appoint a secretary and notify the Registry of the name and address of the secretary within six months of the new LLP Law coming into force. Please find a link to our briefing here.

1.3 Updates to the Jersey Private Fund Guide following JFSC launch of an online application tool

On 2 August 2018, the JFSC announced the launch of an online application tool for Jersey Private Funds (JPFs). All applications, notifications and annual returns in respect of JPFs must (as of 1 September 2018) be made online and will no longer be accepted in paper format. The purpose of the online authorisation tool is to speed up application turnaround times and improve efficiencies. The JFSC has also made a number of other amendments to the Jersey Private Fund Guide (the JPF Guide). The changes of particular significance are that a JPF cannot be more than one vehicle and applicants must now clearly state the date upon which Annual Returns are due by.

1.4 Enhancements to Jersey's Sound Business Practice Policy

On 2 August 2018, the JFSC amended the Sounds Business Practice Policy (SBPP) to clarify that any sale or facilitation of sale of citizenship / citizenship by investment (which includes the administration associated with citizenship and/or arranging for citizenship), is a sensitive activity falling within Table 2 of the SBPP. Table 2 sets out activities that are not within the regulatory oversight of the JFSC but are considered to likely pose a potential reputational risk to Jersey and will therefore be carefully considered by the JFSC when forming an opinion on whether to issue consent under the Control...