Letter from the Guernsey Regulator to
the Financial Services Authority
I attach a copy of a letter to HM Treasury10
for which you will gather that we lodged our new draft Class A
Scheme Rules with them a few weeks ago, and are shortly to lodge
our draft guidance note on independence.
When we met at the end of January I undertook
to let you have copies of the industry circulars we had sent out
recently, and I enclose those; they include our most recent circular
on promotion In the Bailiwick. This latter circular has
been triggered in part by the activities of certain UK fund management
groups, who have been promoting UK authorised unit trusts in Guernsey
without previously registering them with the Commission.
Finally, when we met in January I said I would
let you have copies of my correspondence with Hugh Aldous at Robson
Rhodes on the topic of high income shares of split-cap investment
trusts. I am still concerned at the potentially incestuous nature
of this business and we have been stepping up our required risk
warnings as a consequence.
When we met we agreed that the question of regulation
of closed-end investment vehicles presented some interesting challenges,
particularly since the available remedies for breach of prospectus
undertakings, etc, seem to be limited. This seems to be an area
where regulators could usefully initiate a broader dialogue. Since
most closed-end Investment vehicles are exchange traded, it seems
to me that this could fall quite easily within IOSCO's remit I
wonder, therefore, whether it would be worth encouraging IOSCO
to set up a working group on the regulation of closed-end investment
If you think it's an idea worth pursuing, we
will write to the IOSCC Secretariat and put the idea forward.
9 April 2001