Offshore Companies Gibraltar
Gibraltar’s new “experienced investor fund” regulations: an increasingly competitive regime for funds
This month, Lawyer Monthly speaks to Attias & Levy, an established Gibraltar law firm with a flourishing reputation in many practice areas and a member of Gibraltar Funds & Investments Association. Carol Haw works within a niche department dedicated to handling growth in various specialised fields such as Funds, Corporate Structuring and Reorganisation, Financial Services, Restructures and Structured Financing. The Funds team report on the effect of recent amendments to Gibraltar’s Experienced Investor Fund Regulations.
he “Experienced Investor Fund” (EIF) regime was created in 2005 and became a flagship product for Gibraltar both for setting up Funds and for relocating Funds from other jurisdictions. As Gibraltar is part of the EU,
an EIF provides an attractive vehicle to access a market of over 500 million people. Updated EIF Regulations came into force on 12 April 2012
Establishing an EIF
In order to launch, an EIF simply needs to establish, appoint service providers, settle its offering document/private placement memorandum (PPM) and comply with its own internal approval and authorisation procedures. Copies of its constitutional documentation and PPM together a legal opinion given by a Gibraltar lawyer confirming that the Fund complies with Gibraltar legislation must be filed with the Gibraltar Financial Services Commission (FSC). The 2012 Regulations now provide a choice in the registration process. Either within 14 days after establishment written notification of the establishment of the Fund must be given, or the EIF may file with the FSC for registration 10 days before launch with “automatic” registration at the end of that period if the FSC have not notified an objection. This new registration process, whilst remaining exceptionally fast and user-friendly,
now provides an EIF with the choice of certainty by providing all pertinent documentation to the regulator in advance of launch.
Gibraltar’s EIF legislation now defines an “experienced investor” as a person/entity that falls into one of the following categories: whose ordinary business includes investment related activities, has net assets in excess of €1million (aside from residential property in the case of individuals), who invests a minimum of €100,000 in the Fund or a minimum of €50,000 provided he has been advised by a professional adviser and the Fund’s Administrator has received confirmation of such advice, a professional client, as defined under the Financial Services (Markets In Financial Instruments) Act 2006 and a participant in a Fund that has re-domiciled to Gibraltar where the FSC has permitted the inclusion of such participant either in respect of a specific fund or generally in respect of funds or a category of funds from a certain jurisdiction. For marketing purposes the expanded statutory definition of an experienced investor is attractive, yet participants in an EIF remain obliged to self-certify that they are experienced investors and Administrators and other service providers are not required to verify the factual accuracy of such self-certification (other than confirmation of investment advice being given in the case of a participant investing between €50,000 and €99,999).