Monthly Archives: June 2014

Vote of confidence in Jersey’s finance industry with the popularity of its debt bond issue

June 20th, 2014 by

Jersey Finance has described the States of Jersey £250m debt bond issue as a positive endorsement from the investment markets. The bond issue, which has closed successfully, was two and a half times over-subscribed.

Geoff Cook, CEO, Jersey Finance Limited, said:

“Given that the coupon rate of 3.75% compares favourably with other larger and more regular bond issues, and the considerable interest that has been shown from investors, the bond issue is a significant vote of confidence from the market in the long term future of the jurisdiction and its finance industry, the main source of Government revenues.”

“Of course with the inflation outlook subdued, and the continuing prospect of historic low interest rates, demand for quality bond issues is high. That said, getting a bond issue away at near big league sovereign rates is a fantastic achievement for a small jurisdiction, and testament to the underlying strength of public finances, and the strong fiscal and net asset position of Jersey as a jurisdiction.”

The pricing represents one of the lowest new issue spreads ever achieved for a long dated, non UK guaranteed sterling transaction. Geoff added:

“It’s evident that investors were willing to lend on a long-term basis based on the strength of Jersey’s financial management and ability to repay. They were impressed by Jersey’s ability to manage difficult global economic circumstances and by the financial reserves the Island has built up.”

“Factors such as Jersey having no annual fiscal deficit and no short term debt, and an ability to run balanced budgets will have also been taken into account in the popularity of the issuance.”

He added that the success of the issue was a unique achievement for a jurisdiction the size of Jersey and had reinforced many of the strengths of the Island that also play a part in attracting financial services business including its enduring economic and political stability, sound public finances and the quality and robustness of its regulatory regime.

First published by Jersey Finance Limited, Wednesday 11 June 2014.

Jersey claims third award this year as it is named ‘Best International Financial Centre’

June 20th, 2014 by

Jersey’s competitive edge as an International Finance Centre (IFC) has been recognised by being named ‘Best International Financial Centre’ in the Professional Adviser International Fund and Product Awards 2014.

Now in their 15th year, the Awards, which are organised by leading international media group Incisive Media, are designed to reward and recognise the groups and centres which are at the cutting edge of distributing financial products and services internationally.

Winners, which were announced this week (16th June) were assessed by an independent panel of judges, who took into account a number of features including commitment to target market, appropriateness of product range and services, transparency, and levels of service and support.

Commenting on Jersey’s achievement, Deborah Benn, chair of the judging panel, said:

“Jersey uses a combination of expertise and speed to come up with effective solutions, particularly in the alternative investment sector. Judges were also impressed with Jersey’s Retail Distribution Review (RDR) equivalent which shows a strong sense of which direction the wind is blowing in terms of professional standards. Overall, this year marks Jersey out as having an excellent competitive edge.”

Geoff Cook, CEO of Jersey Finance, added:

“Over the past 12 months it has been crucial for IFCs to respond quickly and appropriately to the market, and winning this award is further evidence that Jersey has done that successfully. We are always looking to highlight the quality and range of fund services Jersey has to offer and its commitment to pursuing high standards of regulation and co-operation, particularly in this new era of AIFMD compliance, so it is encouraging when Jersey’s strengths are acknowledged in this way.’

It is the third award Jersey has won this year recognising its strengths as a finance centre, having been named ‘IFC of the Year’ in both the Wealthbriefing Europe Awards in May and the Citywealth IFC Awards in February. It follows on from a series of award successes in 2013 highlighting Jersey’s strengths as a funds, asset management, corporate structuring and private client centre.

First published by Jersey Finance Limited, Tuesday 17 June 2014

Common misconception about the application of (AIFMD) to small UK fund managers

June 17th, 2014 by

The Alternative Investment Fund Managers Directive (AIFMD) requires fund managers whose regular business is managing an AIF to be authorised or registered as an AIFM.

A regulated firm, that is currently operating as a fund manager in the UK and managing one or more AIFs with total assets below certain thresholds, is regarded as a ‘small UK AIFM’ and is required to apply to the FCA to obtain the appropriate AIFMD authorisation or registration.

Some fund managers in the UK are under the impression that there is no obligation to be authorised or registered under AIFMD at all, simply because the assets they have under management fall below the thresholds introduced by the Alternative Investment Fund Managers Regulation (AIFMR) as implemented in the UK.

However, this is a common misconception, which sub-threshold fund managers must address now, as they are still required to apply to the FCA for a Variation of Permission (VoP) to become a small authorised UK AIFM or to register as a small registered UK AIFM by 22 July 2014.

A firm is considered as a small AIFM if the total amount of assets under management in one or more AIFs:

  • does not exceed EUR100 million in total, including any assets acquired through the use of leverage; or
  • does not exceed EUR500 million in total in cases where the portfolios of AIFs consist of AIFs that are unleveraged and have no redemption rights exercisable during a period of five years following the date of initial investment in each AIF.

If you are a small UK AIFM then you are not subject to the full operational requirements imposed by the AIFMD, however, you must still take action before 22 July 2014 to become either a small authorised UK AIFM or register as a small registered UK AIFM.

Beyond this date a firm is at risk of breaching its regulatory permissions and obligations, which may result in enforcement action from the FCA.

First published by Moore Stephens London, June 2014.