Investment Business

Investment Business conducted in or from the Isle of Man is regulated under the provisions of the Investment Business Acts 1991-1993 ("IBA"). The IBA requires any person or company which conducts Investment Business either in the Isle of Man or through a company registered in the Isle of Man to hold a licence. The definition of what activities constitute Investment Business is contained in the Investment Business Order 2004, and includes:-

• Dealing in investments, either as a principal or as agent. Dealing as principal is licensable only if the person concerned acts as a market maker or if he regularly solicits members of the public to deal in investments. Thus, private investment companies do not need a licence.
• Arranging deals in investments. This includes any activity which directly brings about an investment transaction.
• Managing investments. This includes managing investments under a power of attorney and the provision of safe custody services for bearer instruments of title to investments.
• Giving investment advice in relation to a specific investment. Generic advice is not included in the definition.
• Acting as the Manager or Trustee of a Collective Investment Scheme (whether established in the Island or elsewhere) or providing administrative services to such schemes

The term "investment" includes the traditional investment instruments, as well as derivatives. Life and pensions products are also classed as investments, but land and cash are not.

As can be seen, the definition of those activities which constitute Investment Business is wide. There are, however, a number of activities which are specifically excluded from the scope of the Act. These include:-

• Activities carried out for other companies within the same group;
• Any necessary investment advice given in the course of a profession or Non-investment Business;
• The sale of shelf companies;
• Investment Business carried on in a trustee capacity;
• Introductions to other licensed or authorised Investment Businesses.

A number of organisations are specifically exempt from requiring an Investment Business licence. These are organisations which are subject to an alternative regulatory regime. They include banks and building societies, as well as insurance companies authorised or registered by the Island's Insurance & Pensions Authority.

An Investment Business licence can be granted only to those who have satisfied the Commission that they are "fit and proper" to conduct Investment Business. The Commission applies stringent criteria when considering licence applications. For detailed information about the Commission’s licensing policy please refer to the General Licensing Policy.

Investment Business licences are issued subject to conditions which specify the permitted scope of a licenceholder's activities. Thereafter, the licenceholder is subject also to a number of Regulatory Codes.

Guidance applicable to all licensable sectors/activities

Guidance on matters generic to all FSC-licensable activities/ categories of business includes:

• Disaster recovery/ business continuity
• Outsourcing/Delegation of function
• Responsibilities and Duties of Directors under the laws of the Isle of Man
• Supervisory approach

Further information about the regulation of investment businesses can be obtained in the Commission's Online Handbook.

You may search our lists of licenceholders.

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