What is designated business?
The Designated Businesses (Registration and Oversight) Act 2015 (as amended June 2019) (“the Act”) requires businesses and professions carrying out activities that fall under the definition of a “designated business” to register with the Isle of Man Financial Services Authority (“the Authority”). This is in order to facilitate the oversight and monitoring of those businesses in relation to their Anti-Money Laundering and Countering the Financing of Terrorism (”AML/CFT”) provisions. All persons carrying out designated business are required to comply with AML/CFT legislation, details regarding these requirements can be found on the AML/CFT Legislation and Guidance page.
A designated business refers to any person who undertakes the business as defined in Schedule 1 of the Act. These activities include:
- Legal Professionals (when undertaking certain activities)
- External Accountants, including bookkeepers
- Tax Advisers
- Payroll Agents
- Money Lenders
- Businesses that provide financial leasing arrangements or provide financial guarantees in respect of certain products
- Estate Agents
- Businesses that deal in goods and services of any description which involves cash transactions (one-off or linked transactions) which are equivalent to at least €15,000
- Safe Custody facilities
- Convertible Virtual Currencies
- Specified Non-Profit Organisations
If you have any queries please contact email@example.com. Anyone considering launching a new service should check the resources available on these web pages. The Authority is unable to provide legal advice, therefore you should consider whether it is appropriate to obtain independent legal advice whether an activity is designated business activity and / or whether it may be regulated activity.
Prohibition on carrying on designated business if not registered
It is an offence, which is subject to criminal or civil sanction, to provide, or advertise as offering, certain services without first being registered with the Authority, as per section 7 of the Act. Section 7 of the Act states:
(1) A person must not carry on, or hold itself out as carrying on, a designated business in or from the Island unless the person —
(a) is registered under this Act or exempted from being so registered;
(b) is acting in accordance with the terms of that registration or any condition on exemption; and
(c) complies with AML/CFT legislation
In order to provide designated business activities the application process must be completed and a registration issued by the Authority. Further information can be found on the “Registration Requirements” and “How to register” pages.
The Authority issued a Press Release in December 2021 regarding the requirement to register before providing, or advertise as offering, designated business services.
Background to the Act
It is important to note that the Act does not make persons affected by its provisions licence holders of the Authority. The Authority’s role in licensing and supervising Financial Institutions is distinct and entirely separate from its role under this Act.
Designated businesses are registered and overseen by the Authority for AML/CFT compliance only –they retain their current status with the various professional bodies (if any) responsible for their wider business activities, competence or other matters, such as the Isle of Man Law Society, the ICAEW, ACCA, CIMA, the Office of Fair Trading etc.
The Authority has power under the Act to delegate its oversight responsibility to professional bodies where appropriate. Entities may therefore elect to be overseen by their professional body where this option is available too them. Registration and Enforcement functions are not able to be delegated under the Act and are retained by the Authority.