Applying for a Financial Services Licence
Do I need to apply for a Financial Services Licence?
The Financial Supervision Commission is responsible under the Financial Services Act 2008 for the licensing, regulation and supervision of persons undertaking regulated activities i.e. deposit-taking, investment business, services to collective investment schemes, fiduciary (corporate & trust) services and money transmission services in or from the Isle of Man.
If you are carrying on a regulated activity, as a business, in or from the Isle of Man, you will need to be licensed by the Financial Supervision Commission. Please see the Regulated Activities Order 2009 for details of what constitutes regulated activities and any applicable exclusions and also the Financial Services (Exemptions) Regulations 2009 for specified exemptions from the requirement to hold a licence.
If you are NOT carrying on the activities by way of business, for example if it is voluntary work for a charity, friends or family, then you may not need a licence. If you are in any doubt as to whether an activity is a regulated activity or whether it is being done by way of business, please contact us or seek legal advice.
The Commission’s staff can assist and guide you with the preparation of an application for a licence. However, the Commission does not give legal advice and, in cases of doubt or difficulty establishing whether regulated activity is being conducted, applicants should seek appropriate legal advice from a firm of advocates in the Isle of Man.
How do I apply for a Financial Services Licence?
A business wishing to commence regulated activities in or from the Isle of Man needs to be licensed. To obtain a licence it should contact the Authorisations Division as soon as possible in advance of the desired date for commencing business to arrange a meeting to discuss a potential licence application, Tel: 01624 689300.
The assessment process for licence applicants involves a thorough evaluation to ensure the Commission’s fitness and propriety criteria, including integrity, competence and solvency, are met. This evaluation will be carried out in accordance with the Commission’s General Licensing Policy, under the Commission’s Licensing Procedure. The General Licensing Policy is supported by the Training and Competency Framework. Forms to be submitted by individuals wishing to be vetted are the "Personal Questionnaire" and "Bankers Questionnaire" which may be found on the "PQs & BQs" page of the website.
Please note that the onus is on the licence applicant and relevant individuals connected with the licence applicant to satisfy the Commission that they are fit and proper, not on the Commission to prove that they are not.
With effect from 1st August 2008, each licenceholder has only one financial services licence that will cover all the regulated activities which are undertaken. A separate licence is required by each locally incorporated entity or branch of a non-locally incorporated entity, irrespective of whether the entity is part of a group or operates under one or more business names. If an entity also conducts activities that are regulated by another body, such as the Insurance and Pensions Authority, a separate licence will be required from that body as well.
When applying to the Commission for a licence, it will be necessary to agree for which classes of regulated activity the licence is required. The Commission’s Authorisations Division or Supervision Division can provide guidance on this subject – contact details below.
Complete the relevant sections of the application form.
A full list of supporting documentation is set out in the application form and needs to be submitted with the application to demonstrate the fitness and propriety of the applicant (e.g. audited accounts and a business plan). The supporting documentation varies depending on which classes of regulated activity you are applying to undertake.
In general, the more complete the application, the simpler (and quicker) it is to process. However, applications may be submitted with certain items marked: "to follow". For example, it is common for a potential start-up business to obtain a quote for professional indemnity insurance, but not place the business on cover until the Board of the Commission has considered the application.
To assist you in completing the application form please read the Guidance Notes within the application form carefully.
The following documents may also assist you:
- Guidance on business plans;
- Guidance for trustees & fiduciary custodians of schemes; and
- Proforma subordinated loan agreement(N.B. This proforma agreement has been prepared specifically for use by applicants for and holders of a financial services licence under the Financial Services Act 2008. If you are not an applicant or licenceholder, you should not copy, circulate or in any other way use or rely on the wording contained in the agreement. Applicants and licenceholders may copy the proforma but must not rely on the wording of the proforma and should take their own legal advice as to the appropriateness of the wording and the document in their own circumstances.)
How much will an application cost?
In respect of each class of regulated activity:
A non-refundable fee is payable when you apply for a licence. This application fee covers the Commission’s costs in processing the application.
If a licence is issued to you, an annual licence fee is payable for each year in which you hold a licence.
Current application and annual fees are detailed in the Financial Services (Fees) Order 2009 and the Collective Investment Schemes (Fees) Order 2009.
What happens next?
The application will be processed in accordance with the Commission’s Licensing Procedure.
How long will an application take?
The Commission’s current published service standard for processing an application, from receipt to a hearing by the Commissioners, is 3 months. This standard applies to an application with which there are no major difficulties concerning the applicant or people connected with the applicant.
An application may take considerably longer than 3 months to process if it is incomplete or if there are issues in relation to the applicant or any of its key persons that require further investigation before a recommendation can be made to the Board of Commissioners. To ensure your application is processed as quickly as possible, it is important that you arrange for all the necessary forms and documentation to be completed as accurately as possible and submitted in a timely manner.
During the processing of your application, two-way communication with the Authorisations Division is essential. This dialogue will allow the Authorisations Division to gain a better understanding of the business, which may speed up the application process
For further information
The Authorisations Division is responsible for the processing of applications for licences and for the vetting of specific individuals in a licenceholder and may be contacted on 01624-689310 or 01624- 689380.
The Supervision Division is responsible for the on-going supervision of regulated entities and may be contacted on the following numbers:
- Deposit-takers: 01624-689320;
- Fiduciary (Corporate and Trust) Service Providers: 01624-689341;
- Investment Businesses and businesses providing services to Collective Investment Schemes: 01624-689329.
A list of advocates is available from the Isle of Man Law Society at www.iomlawsociety.co.im.
The "Being Regulated" pages, including Handbooks for the various regulated sectors, provide further information about on-going regulatory requirements.
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