Investment
and Fund Management
The Financial Services Commission
is responsible for the regulation of investment
business in Gibraltar. See Offshore
Tax Regimes for further details.
Banks
or investment companies offering offshore investment
management services to high-net-worth individuals
or corporate investors are regulated under the
Financial Services Ordinance 1998. See Banking
for a description of the procedures followed
by the Financial Services Commission when considering
the issue of a license; the same procedures
are applied to investment companies as to banks.
There
is a lively investment management sector in
Gibraltar, with 33 licensed portfolio management
firms as of 2007. Assets under management totalled
GBP 11.8bn in December 2006. Many of the banks
in Gibraltar also offer investment management
services, and there are also independent stockbrokers.
The
investment fund sector is regulated under the
Financial Services (Collective Investment Schemes)
Regulations 1992, as amended. A full list of
the legislation affecting the sector can be
found here.
Investment
funds in Gibraltar are usually formed under
a trust deed either as unit trusts or mutual
funds, or under the Companies Ordinance as private
or public companies. A public investment company
(PIC) must have a minimum paid-up capital of
G£50,000 and if it is not listed on a
recognised exchange its head office must be
in Gibraltar.
In July, 2003, the UK gave its approval for
passporting rights that will allow local investment
firms in Gibraltar to offer services to individuals
in other EU member states.
This
was the third passporting 'badge' that the jurisdiction
had received following banking and insurance
passports and meant that firms regulated by
a recognised competent authority such as the
FSA do not have to seek regulatory approval
from regulators in other member states.
“We
have received written confirmation from the
UK Government of Gibraltar’s passporting
rights into the EU and EEA single market in
investment services. Investment services providers
based in Gibraltar and authorised by the Financial
Services Commission may therefore operate in
other member states of the EU and EEA, on the
basis of their Gibraltar authorisation and in
accordance with established procedural requirements,”
a government spokesman commented.
“This
development now enables the Gibraltar Government
to commence the Investor Compensation Scheme
Ordinance which was passed by the House in July
2002,” continued the spokesman.
However,
the passport did not permit investment firms
from the Rock to offer services in the UK as
this was subject to the completion of a separate
agreement between Gibraltar and Britain.
In
December 2005, the Gibraltar Government and
the UK Government concluded an agreement relating
to the passporting of Investment Services.
The
agreement enabled investment services firms
established in Gibraltar to passport (that is
to market and sell) their products and services
into the UK market. The investment services
passporting agreement was expected to come into
effect by March 2006 when Gibraltar had passed
some necessary legislation.
In
addition, the
text of the Financial Services (Conduct of Business
In The United Kingdom) Regulations 2006 can
be found here.
In
2005, Gibraltar introduced Experienced Investor
Funds under the Financial Services (Experienced
Investor Funds) Regulations, 2005. These are
funds designed for professional, high net worth
or experienced investors, typically with net
worth in excess of €1,000,000.
See
a full description
of this and other fund regimes provided by Gibraltar
law firm Hassans.
