Isle of Man: Law of Offshore
Investment Management Law
This page was last updated on 24 February 2020.
From 1 May 2010, the Isle of Man Financial Supervision Commission (IOMFSC) permitted the establishment of regulated funds in the Isle of Man, with specialist and qualifying fund types both being relaunched as registered funds. According to the IOMFSC, the move is in response to the new market environment and recognizes the importance of appropriate regulatory oversight for funds.
On the basis of the proposed regulatory structure, the Irish Stock Exchange has confirmed that funds which are Isle of Man regulated funds under the Collective Investment Schemes (Regulated Fund) Regulations 2010 are suitable for listing on the Irish Stock Exchange without the imposition of a €100,000 (US$133,000) investment threshold criterion.
Licensing of investment management, including that of collective investment funds, was introduced by the Investment Business Acts, 1991 to 1993, with a definition of activities to be licensed contained in the Investment Business Order 1991. The regulatory regime for collective investment funds is now governed by the Collective Investment Schemes Act 2008 (CIS Act) which came into force on 1 August 2008, having been previously established by the Financial Supervision Act 1988.
Subordinate legislation made under the Financial Supervision Act 1988 continues to have effect as if it was made under the relevant provisions of the CIS Act.
Collective Investment Schemes Act 2008
Under the Collective Investment Schemes Act 2008 (CIS Act), a licence to carry on the class 3 regulated activity (services to collective investment schemes) permits a business operating in or from the Isle of Man (within certain criteria and with specified exclusions) to provide the following services to collective investment schemes: act as a manager, administrator, trustee, fiduciary custodian, custodian, promoter, asset manager or investment adviser.
The CIS Act sets out the statutory framework for the regulation of collective investment schemes, more commonly known as unit trusts, investment funds and open-ended investment companies. The CIS Act sets out 3 classes of scheme:-
- Authorised schemes under Schedule 1 to the CIS Act;
- International schemes (including full international schemes and other prescribed classes of scheme) under Schedule 2 to the CIS Act; and
- Recognised schemes under Schedule 4 to the CIS Act.