New regulations from the Guernsey Financial Services Commission will remove many of the restrictions governing the activities of protected c...

New regulations from the Guernsey Financial Services Commission will remove many of the restrictions governing the activities of protected cell companies. The GFSC has also revised limited partnership rules designed to allow greater participation by retail investors in collective investment schemes. Under the new regulations PCCs can conduct business other than in financial services, including simple asset holding to complex financial arrangements for sophisticated corporate customers. Before the new rules, only collective investment funds, insurers and securitisation and other unregulated vehicles involved in financial services activities could be established as PCCs. Peter Neville, Director General of the Guernsey Financial Services Commission, said: "the PCC structure has been extremely successful, combining innovation, customer protection and cost effectiveness. It is increasingly being copied by other jurisdictions." "After eight years it has become clear that the PCC concept has stood the test of time and that protected cell companies should now be able to carry out unregulated activities as well as regulated activities. This new product may well prove to be of significant benefit to Guernsey.” Industry commentators have predicted that the use of PCCs in trust and fund administration is likely to increase significantly. The new limited partnership regulations offer scope, in appropriate circumstances, for reducing the audit requirements for funds used by institutional and professional investors, according to the GFSC. GFSC added that the new regulations will help give the island the edge over other offshore jurisdictions.