The Authority’s Designated Businesses Registration Policy (“the Registration Policy") sets out the criteria that applicants must satisfy to be successful in the registration of their business. If it is determined an application under the Act must be submitted please ensure you are familiar with the Registration Policy.
In particular a business applying to operate as a convertible virtual currency (“CVC”) business must be able to demonstrate compliance with the real presence requirements as set out in section 4.1 of the Registration Policy:
a) the CVC business must have (and continue to have) at least 2 IoM resident directors; and
b) management and control of the CVC business must be in the Island.
This is because of the limitation of the Authority’s ability to oversee CVC businesses which lacks substance or real presence on the Island and such a characteristic is considered to pose an unacceptably high risk of money laundering and terrorist financing.
Fitness and Propriety
The Authority will not register a business where it determines that the applicant, including the persons associated with it, are not fit and proper to undertake the designated business activities.
The fit and proper test is both an initial test at the time of registration and a continuing test in relation to the compliance with AML/CFT legislation of designated business.
Under Section 9 of the Act. In assessing the fitness and propriety of an applicant, the Authority would take into consideration whether the applicant:
- has been convicted of an offence —
- under AML/CFT legislation;
- under the law of a country or territory outside the Island if the conduct giving rise to the offence would constitute an offence under AML/CFT legislation if it had occurred in the Island;
- involving dishonesty (whether under the law of the Island or elsewhere);
- under a relevant Act (as defined in the Act); or
- of perjury or conspiracy to pervert the course of justice (whether under the law of the Island or elsewhere);
- is or has been the subject of any action with respect to any breach of a relevant Act (as defined in the Act) or AML/CFT legislation;
- has knowingly or recklessly provided misleading or false information in the application for registration; or
- is otherwise considered by the Authority not to be fit and proper for reasons related to the risk of money laundering or the financing of terrorism.
Fit and proper test for specified person
Designated Businesses must take reasonable measures to satisfy themselves that the Specified Persons associated with the business are fit and proper. Before a Specified Person Questionnaire is submitted to the Authority, a criminal records check should be undertaken. In order for a designated business or applicant to satisfy itself as to the integrity of an individual, it must review a certificate that evidences that a BASIC level criminal records check has been carried out on that individual.
The Authority expects the check to have been carried out within the last 12 months of the date of the Specified Person Questionnaire. If the criminal records check is less recent (or has not been undertaken), the designated business or applicant must provide clear and compelling reasons for this, and this rationale will form part of the Authority’s consideration of the individual’s fitness and propriety.