Authority reminder of the duties and responsibilities of directors (or equivalent) of corporate entities administrated by licenceholders carrying on Class 4 (Corporate Services) regulated activity

The Isle of Man Financial Services Authority (the “Authority”) makes this statement in accordance with powers conferred on it under section 30 of the Financial Services Act 2008 mindful of its regulatory objectives which include ensuring that the Authority maintains confidence in the Island’s financial services through effective regulation, thereby supporting the economy and its development as an international finance centre.

The Authority takes this opportunity to remind licenceholders carrying on Class 4 (Corporate Services) regulated activity that the directors (or equivalent)[1] of a corporate entity managed by the licenceholder have an obligation to ensure that the corporate entities under their management  are compliant with all regulatory, statutory and legal obligations including (but not limited to) statutory company filings and the preparation and filing of income tax returns.

By offering their services as a director as a profession or by way of business, such controlled function post holders are expected to act with skill, care and diligence, appropriately and independently in the best interests of the corporate entity The highest standard of care, skill and diligence is expected of them in discharging their duties. Where directors of corporate entities fail in their duty to ensure the entity is compliant with all regulatory, statutory and legal obligations, this may cause the Authority to assess the fitness and propriety of the licenceholder and its key staff.

All directors (or equivalent) should understand the nature and extent of the duties they owe in their role and where there is in any doubt, they should take appropriate professional advice.[2]

Further information can be found in the following Authority guidance here and here.

[1]Controlled function R23 as set out in the Authority’s Regulatory Guidance titled ‘Fitness and Propriety’ dated 1 March 2022

[2] ‘Financial Services Act 2008 Guidance on the responsibilities and duties of directors under the laws of the Isle of Man’ Paragraph 2.1