What is an Offshore Fund?

Offshore fund is collective investment vehicle that might be structured like a UK Unit Trust; more frequently it takes the form of an Open-Ended Investment Company (OEIC). The French rendering of OEIC 'SICAV' (Societe d'Investissement Capital Variable) is used in the French-spoken jurisdictions like Luxembourg. Offshore funds are subject to formal constitutions, and are operated and monitored in compliance with the rules of the local regulatory regime.

Funds that are approved for marketing in the UK, can achieve this status in the following ways:

a) To be domiciled in one of the 'Designated Territories' like Jersey, Guernsey, the Isle of Man or Bermuda, the fund becomes 'FSA-Recognised'.

b) Fund managers outside of these Designated Territories may also apply to the FSA for recognition of specific funds. Luxembourg and the Republic of Ireland are homes to many of this type of instrument.

c) By satisfying 'UCITS' requirements. Undertakings for Collective Investments in Transferable Securities are a set of European Union regulations, enforceable uniformly in all EU members' jurisdictions, so permitting providers to market their products to citizens of other EU countries.

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30/09/2006
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