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Newsletter | Articles Isle of Man Expects to Double Its Funds The Isle of Man has announced its expectation to double its funds under administration to USD100bn over the next three years. The jurisdiction recently launched a range of fund categories including Specialist Fund and Qualified Fund. The Specialist Fund has a minimum USD100,000 initial subscription and does not require regulatory pre-approvals. Interestingly, the Isle of Man has chosen not to use the term ‘unregulated’ as Jersey has recently announced it will launch unregulated funds early next year. For years the jurisdiction, along with other Crown Dependencies, has been striving to convince organisations, including the OECD, FATF and the US Senate that it is among the best regulated jurisdictions in the world. So why introduce unregulated funds now? Jersey is the clear Crown Dependencies leader in terms of offshore funds under administration: UK Crown Dependencies Funds Under Administration June 30, 2007 Jurisdiction Jersey Guernsey Isle of Man Source Jersey FSC Guernsey FSC IOM FSC US$ bn 421 311 50 Percentage of total 54 40 6 Jersey successfully introduced the Expert Funds Guide in 2005, which offered both speed and regulatory flexibility for those wishing to domicile funds in Jersey for expert investors. Now it is seeking to stay ahead of the crowd by launching new unregulated funds which simply require eligible funds to notify the Jersey Financial Services Commission (JFSC) of their launch, not to seek approval. The funds are unregulated by the JSFC on the grounds that either the funds or the investors into them are already well regulated elsewhere. For the JSFC to enter into the regulatory process would be a waste of resource and time, which would remove all the incentives for fund managers to base funds in Jersey. There will be two types of fund: Unregulated Exchange Traded Funds – designed for funds which are regulated through listing on a recognised stock exchange, which renders further supervision in Jersey redundant. Unregulated Eligible Investor Funds – with a minimum of USD1m initial investment, these funds are open, as the title implies only to eligible investors (recognised by a regulator as expert investors either institutional or private). Where Jersey leads, Guernsey is not far behind, having also secured a position as a centre for more specialised funds. For more information contact ILS’s New Business Co-ordinator Stephen Colderwood.