ESMA recommends granting Jersey funds and managers an AIFMD Passport

The Jersey Financial Services Commission (JFSC) today welcomed the recommendation that the European Securities and Markets Authority (ESMA) made to the European Parliament, Council and Commission it should be amongst those ‘third countries’ granted an (Alternative Investment Fund Managers Directive) AIFMD passport.

The JFSC has fully engaged with ESMA and has been working closely with Member State regulators as part of the assessment process.

Jersey is not a member state of the EU and is reliant on the UK for its defense being a Crown dependency. The island’s relationship with the EU is now more complicated after the UK’s referendum to leave the EU.

Following ESMA’s advice today, there is now a period of up to six months for the European Commission to propose appropriate legislation and for the European Parliament and Council of Ministers to agree to the third country passporting rules becoming applicable to Jersey AIFs and AIFMs.

channelMike Jones, Director of Policy at the JFSC commented:

“We are delighted with this further announcement from ESMA recommending Jersey be granted a ‘third country’ passport, which positively recognises the Island’s robust AIFMD framework and fully compliant regime which has been introduced.

Jersey is one of Europe’s leading centres for alternative funds business and the JFSC is committed to supporting the Industry by ensuring we have the right frameworks in place to ensure long term success.”

Can Jersey develop into a FX and derivatives regulated hotspot? Without MiFID (Markets in Financial Instruments Directive) passporting being a point of discussion, that seems unlikely for now. Last summer Swiss and Jersey financial regulators signed an MoU, as both watchdogs seeked to enhance collaboration in the supervision of financial services firm. If Jersey can emulate the Swiss financial sector, they are on their way to grabbing serious market share within the EU and globally within the alternative investment sector.

These moves by ESMA is like a punishment of sorts with the UK voting to leave EU jurisdiction…as further to just Jersey, today ESMA also advised on an extension of the funds passport to 12 non-EU countries, including the USA, Canada, Hong Kong, Singapore and Japan.

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