Collective Investment Schemes Handbook til 1 May 2010
3 – Collective Investment Schemes (or Funds) Handbook
Content
1. Introduction
The Collective Investment Scheme handbook is produced to provide licenceholders (those who are licensed by the Financial Supervision Commission to provide services to Collective Investment Scheme business in or from the Isle of Man), potential licenceholders and other interested parties with easy access to the legislation and guidance relating to Collective Investment Scheme activities in or from the Isle of Man.
The handbook is only produced in an on-line format. However, copies of all statutory documents (original, un-amended legislation) may be obtained from the Tynwald Library, by quoting the legislative number at the top of each document (e.g. SD01/01).
Please find links below to the Collective Investment Schemes Act 2008 (“the CIS Act”), the Financial Services Act 2008 (“the Act”), secondary legislation (regulations and regulatory codes) and relevant pieces of guidance.
Important Notes:
- The Collective Investment Schemes Act 2008 came into operation on 1st August 2008. It should be noted that 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
- In relation to the existing subordinate legislation and guidance the term “trustee” should be read as “Trustee” if the scheme is a unit trust and “fiduciary custodian” for other types of scheme structure.
Unless otherwise agreed with the Commission, all businesses which held licences for collective investment schemes’ business until 31st July 2008, will normally hold licences to conduct Class 3 Services to Collective Investment Schemes from 1st January 2009.
Guidance (and where applicable other legislation) relating to other Classes of Regulated Activities may be found in handbooks relating to other licensable activities: Deposit taking, Investment Businesses, Corporate Service Providers, Trust Service Providers, Money transmission, and Management and Administration services.
In case of any query, please contact the Funds & Investment Services team at the Commission, on +44 (0)1624 689329.
2. Brief synopsis of schemes under the Collective Investment Schemes Act 2008
2.1 Statutory Basis
The CIS Act sets out the statutory framework in the Isle of Man for the promotion and regulation of collective investment schemes. The definition of Collective Investment Scheme is set out at section 1 of the CIS Act (and arrangements that are not to be treated as schemes are set out in the Collective Investment Schemes (Definitions) Order 2008.
2.2 Promotion of Schemes
Section 3 of the CIS Act prohibits advertising, or advising or procuring investment in a collective investment scheme unless it is an authorised collective investment scheme or a foreign collective investment scheme recognised under the CIS Act. For Guidance on promotion of schemes please refer to:
- Guidance Note – Promotion of Authorised Schemes, and
- Guidance Note - Promotion of Full International Schemes, Specialist Funds, Qualifying Funds, Experienced Investor Fund and Professional Investor Funds.
International Schemes – other matters
The Commission permits a certain level of "inward outsourcing" of fund administration activities to Isle of Man licensed fund managers or fund administrators so that such entities can administer certain activities for non-Isle of Man collective investment schemes, without such schemes becoming an International Scheme. Please refer to the Commission's Guidance Note on
An international collective investment scheme, structured as an Isle of Man limited partnership may have more than 20 partners in accordance with the
- Limited Partnerships (Collective Investment Schemes) Regulations 2004
A limited partnership that is an international scheme (other than an exempt international scheme) is exempted from the requirement to disclose details of the limited partners on the public file held at the Companies Registry by the
- Limited Partnerships (Collective Investment Schemes) (Exemption) Regulations 2005
International Schemes (with the exception of exempt international schemes) do not have to file returns of allotments and redemptions of shares with the registrar of companies by virtue of the exemption contained in the
- Collective Investment Schemes (Returns of Allotment and Redemption) (Exemption) Order 1999.
3. Legislation
3.1 Primary legislation
The Primary legislation governing Collective Investment Scheme activities in or from the Isle of Man is the
- Collective Investment Schemes Act 2008 (CIS Act) and the
- Financial Services Act 2008 (the Act).
The following secondary legislation is in force under the Act and the CIS Act. Where regulations, orders and regulatory codes have been amended after they were made, the “as amended” version is shown:
3.2 Secondary Legislation
Collective Investment Schemes Act 2008
- Collective Investment Schemes (Appointed Day) Order 2008
- Collective Investment Schemes (Definition) Order 2008
- Collective Investment Schemes (Fees) Order 2009
- Authorised Collective Investment Schemes (Compensation) Regulations 2008
Legislation applicable to Authorised Schemes
- Financial Supervision (Authorised Collective Investment Schemes) Regulations 2005
- Financial Supervision (Scheme Particulars) Regulations 1988
- Authorised Collective Investment Schemes (Compensation) Regulations 2008
- Collective Investment Schemes (Authorised Schemes) (Alternative Investment and Borrowing Powers) Regulations 2009
Legislation applicable to Full International Collective Investment Schemes
- Financial Supervision (International Collective Investment Schemes) Regulations 1990
- Financial Supervision (International Collective Investment Schemes) (Advertising and Scheme Particulars) Regulations 1995
- Financial Supervision (Prescribed Countries and Territories) Regulations 1990
Legislation applicable to Other International Collective Investment Schemes
- Financial Supervision (Specialist Fund) (Exemption) Order 2007
- Financial Supervision (Qualifying Fund) (Exemption) Order 2007
- Financial Supervision (Experienced Investor Fund) (Exemption) Order 1999
- Financial Supervision (Professional Investor Fund) (Exemption) Order 1999
Legislation applicable to Recognised Schemes
- Financial Supervision (Recognised Schemes) (Facilities in the Island) Regulations 1988
- Financial Supervision (Recognised Schemes) (Notification) Regulations 1988
- Financial Supervision (Recognised Schemes) (United Kingdom) Order 2006
- Financial Supervision (Recognised Schemes) (Jersey) Order 1989
- Financial Supervision (Recognised Schemes) (Guernsey) Order 1989
- Financial Supervision (Recognised Schemes) (Ireland) Order 2006
Legislation applicable to Promotion of Schemes
Financial Services Act 2008
- Financial Services Act 2008 (Appointed Day) Order 2008
- Regulated Activities Order 2009
- Financial Services (Exemption) Regulations 2009
- Financial Services Rule Book
- Financial Services (Civil Penalties) Regulations 2008
- Financial Services Fees (No. 2) Order 2009
- Financial Services (Not fit and Proper) Regulations 2008
- Financial Services (Register of Permitted Persons) Regulations 2008
- Financial Services (Appointment of a Manager) Order 2008
Disaster Recovery
The use of facilities on the Island by regulated businesses from other jurisdictions for temporary business continuity purposes is addressed by Schedule 2 of the Financial Services (Exemption) Regulations 2009.
General Legislation
- Limited Partnerships (Collective Investment Schemes) Regulations 2004
- Limited Partnerships (Collective Investment Schemes) (Exemption) Regulations 2005
- The Financial Services and Markets Act 2000 (Collective Investment Schemes) (Designated Countries and Territories) Order 2003
- Collective Investment Schemes (Prospectus) (Exemption) Regulations 2005
- Collective Investment Schemes (Returns of Allotment and Redemption) (Exemption) Order 1999
4. Guidance applicable to collective investment schemes
4.1 The Commission has issued guidance notes relating to Collective Investment Schemes and the provision of services to Collective Investment Schemes, covering the following matters:
4.2 The Commission has issued the following forms for use by collective investment schemes and providers of services to collective investment schemes:
4.3 Other guidance and forms (not included above) which relate to collective investment scheme activities:
- Application Form for a licence
- Indirect Tax Concession (VAT)
- Rule Book consent and notification summary table
- Rule Book obligations to keep registers
- Rule Book obligations to maintain policies
- Interim Financial Returns Form
- Supplement Licensing Policy for Class 3
5. Guidance applicable to all licenceholders
Guidance on matters generic to all licenceholders:
- Anti Money Laundering
- Business Plans - rule 8.9 guidance
- Corporate Governance
- Disaster recovery/ business continuity
- General Licensing Policy
- Licenceholder contact sheet
- Vetting forms
- Responsibilities and Duties of Directors under the laws of the Isle of Man
- 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.)
- Supervisory approach
- Training & Competence
6. Sundry web links and other matters
The Isle of Man Fund Management Association www.fma.org.im
The Alternative Investment Management Association www.aima.org
The International Organisation of Securities Commissions www.iosco.org/
