The Isle of Man Office of Fair Trading (OFT) is required under the Moneylenders Act 1991 to maintain a register of persons carrying on a business of lending money in the Island. The register is available for inspection during office hours.
Who is required to be registered as a moneylender?
Any person other than a Bank or other exempt organisation who carries on in the Island a business which makes loans of money to consumers and/or sole traders must be registered as a moneylender. Also if your business includes the collection of debts you may need to register.
If the lending which you undertake is an exempt transaction as defined in the Moneylenders (Exempt Persons and Exempt Transactions) (No.2) Regulations 2013 you do not need to be registered.
If you do not loan money but provide other forms of credit such as hire purchase or credit sale facilities, trading checks or credit cards you are not required to be registered.
Carrying on a business in the Isle of Man
This is a matter of fact. If any aspect of your business is carried on to any extent in the Island then you are covered by the Moneylenders Act 1991. The various activities which would make up ‘carrying on a business’ include amongst other activities the formulation of policy on the lending of money, the marketing of the lenders services, the processing of applications for loans (including the decision on whether to grant or refuse an application), the entering into of contracts for loans and the collection of repayments.
If you intend to lend to consumers outside the Island then you should check with regulatory authorities in the jurisdictions into which the loans are to be made as whether registration is required there too.
The application process
If you wish to apply for registration you will need to forward a completed application well in advance of the date on which you intend to commence lending.
In addition to the application form we will require supporting documentation, details of which are set out in the application form. These include a business plan, a bank reference plus an accountant or advocates reference in relation to the potential moneylender plus personal and bankers questionnaires for each official as detailed below.
The assessment process for registration involves a thorough evaluation to ensure the applicant and its key officials are fit and proper to operate a business of lending money and, therefore, all individuals who hold key positions must be notified to the OFT. Where the applicant is a company these include the directors, resident manager, controllers and Money Laundering Reporting Officer (MLRO) of the company. Each named person should submit a Personal Questionnaire and a Bankers Questionnaire.
The Moneylenders Act 1991 defines Resident Manager and Controller as follows:-
- Resident Manager: Where the applicant is a person, this means an employee of that person or in the case of a firm or company, a partner in the firm or a director of a company who is resident in the Island and responsible in the Island for the applicants business of lending money.
- Controller: In relation to a company this is a person in accordance with whose directions or instructions the directors of the company are accustomed to act or who either alone or with any associate is entitled to exercise or control the exercise of one third of the voting power at any general meeting of the company.
Moneylenders are covered by the Designated Business (Registration and Oversight) Act 2015 (‘the DB Act’), which came into force on 26 October 2015.The DB Act places responsibility on the Financial Services Authority (‘FSA’) for the oversight of the adherence of certain businesses, including moneylenders, to the Island’s Anti Money Laundering (‘AML’) and Countering the Finance of Terrorism (‘CFT’) legislation. Moneylenders conducting relevant business must register with the FSA before they commence trading. More information is available on the FSA Website. The FSA’s oversight role is in relation to AML/CFT compliance only; registered Moneylenders will still retain their current status with the OFT.
In general, the more complete the application, the simpler (and quicker) it is to process. Applications may be submitted with certain items marked: "to follow".
There is a non-refundable fee of £500 payable to “Isle of Man Government” at the time of application with registration being for a period of three years.
You are strongly advised to familiarise yourself with the Moneylenders Act 1991 before applying for registration.
Further advice regarding applications for registration is available from the OFT at the address below. However, please note that whilst OFT staff can assist and guide you in your application for registration, the OFT does not give legal advice and, in cases of doubt or difficulty in establishing whether you are required to register as a moneylender, applicants should seek legal advice.
Thie Slieau Whallian, Foxdale Road, St John's, Isle of Man, IM4 3AS Tel: (01624) 686500 or email:email@example.com