In a welcome development, the Jersey Financial Services Commission has confirmed that it will licence both Jersey-law and foreign-law LLPs for fund services business under the Financial Services (Jersey) Law 1998, pursuant to new policy papers published by the Commission at the end of last week.
The licensing of LLPs is permissible in respect of both the 'management' and 'advisory' classes of fund services business. That is, LLPs will be able to act as a manager, general partner, investment manager or investment adviser to investment funds. In particular, it is expected that the ability to licence a Jersey-law LLP, or a UK-law LLP managed in Jersey, to act as the general partner of alternative investment vehicles structured as English or Scottish limited partnerships will prove popular.
There are some key conditions to the new policy, ensuring both sufficient connection with Jersey and facilitating regulatory oversight by the Commission, as follows:
- a partner in a licensed LLP who participates in the management of that LLP (for example, as a managing partner) must either be a natural person or be a Jersey-incorporated company which has at least two Jersey-resident directors;
- a corporate partner of a licensed LLP must have a board of directors comprising of only natural persons; and
- a licensed Jersey-law LLP must have at least one partner domiciled or incorporated in Jersey and appointed as its 'designated partner'.
As well as permitting the licensing of LLPs to act in relation to investment funds, the Commission has also confirmed that Jersey-law LLPs can act as the sole general partner of a limited partnership which in turn is the licensed general partner to an investment fund - ie a Jersey-law LLP can act as the GP of a 'GP/LP' (whether the LP is a 'traditional' limited partnership, a separate limited partnership or an incorporated limited partnership). The available classes are the same as those mentioned above, and it is thought that licensed GP/LPs may use Jersey LLPs as their general partner as an alternative to a Jersey limited company. The same conditions as mentioned above will apply to the Jersey-law LLP: any corporate 'managing partners' must be incorporated in Jersey and have two Jersey-resident directors; only natural persons are permitted on the board of any corporate partner; and there must be a Jersey domiciled/incorporated designated partner.
Our firm's briefing on the Limited Liability Partnerships (Jersey) Law 1997 can be found here.
For further information, please contact Martin Paul or Richard Le Liard.
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