Retail collective investment schemes established outside the Isle of Man wishing to be promoted to the general public of the Island must obtain ‘recognition’ by the Isle of Man Financial Services Authority ('the Authority'). These schemes are referred to as Recognised Schemes.
A Recognised Scheme should be subject to equivalent regulatory requirements in its own jurisdiction to those applying to an IOM Authorised Collective Investment Scheme (relevant information can be found here).
For legislation applicable to Recognised Schemes please click here.
For forms applicable to Recognised Schemes please click here.
Schedule 4, Paragraph 1 - for those schemes originating from ‘designated territories’
To date, the ‘designated territories’ are: Jersey, Guernsey, UK, Luxembourg and Ireland. They have been selected by the Authority on the basis that it has been determined that adequate protection is afforded to participants in schemes managed in and authorised under the laws of those jurisdictions. Accordingly, the Authority accepts the offering document that has been approved by the jurisdiction and does not impose any additional requirements i.e. notification of an amended offering document rather than pre-approval is sufficient. However, the Authority has published guidance which Schedule 2 to the Collective Investment Schemes (Recognised Schemes) Regulations 2015 contains the information that should be included in a scheme’s offering document to ensure compliance with the Isle of Man Regulations.
The scheme must give the Authority notice that it wishes to be recognised using the notification form which can be accessed here. Notice for recognition is not valid unless the notification form is:
fully completed and duly signed; and
accompanied by the documents specified in Section C of the notification form (excepting any documents which may not be available).
Submission of the notification form and accompanying documentation should be made in hard copy.
Before the expiry of the two month notification period the governing body of the scheme will be advised if the scheme is to be recognised or not. If the scheme is recognised, the periodical fee will become payable.
Schedule 4, Paragraph 2 - for those scheme which are not regulated in a designated territory under equivalent regulations to Isle of Man Authorised schemes.
These schemes must be recognised on an individual basis and so are referred to as “individually recognised schemes”. Individually recognised schemes must appoint a representative in the Island who holds a Class 3(13) financial services licence and has the power to act generally for the governing body. The representative should have a written agreement in place with the governing body, which meets the requirement of Paragraph 2(8) of Schedule 4 to the CIS Act.
Schedule 3 to the Collective Investment Schemes (Recognised Schemes) Regulations 2015 contains the information that should be included in the scheme’s offering document to ensure compliance with the Isle of Man Regulations.
Application for recognition should be made using the relevant application form, which can be accessed here and accompanied by the application fee. There are different fees applicable to single tier and umbrella individually Recognised Schemes. These are set out in the relevant Fees Order.
Application for recognition is not valid unless the application form is:
fully completed and duly signed; and
accompanied by the documents specified in Section F of the notification form (excepting any documents which may not be available).
Submission of the application form and accompanying documentation should be made in hard copy.
The governing body of the Scheme will be advised if the scheme is to be recognised or not. This can take up to 6 months but the period may be shortened if the governing body of the scheme or its legal adviser can provide evidence of compliance with the IOM legislation for both the scheme particulars document and the constitutional documents. If the scheme is to be recognised a recognition order will be signed by the Authority and sent to the governing body of the scheme. The periodical fee will become payable at this point.
All Recognised Schemes must maintain facilities for the public and complaints on the Island. Facilities for participants must be maintained, but these may be overseas.
Recognised Schemes from designated territories are required to provide ongoing notifications to the Authority - please refer to section 6 of the Collective Investment Schemes (Recognised Schemes) Regulations 2015.
In the case of individually Recognised Schemes, any proposed alteration (including any proposal to replace the manager, trustee/fiduciary custodian or governing body) must be pre-notified in writing to the Authority in accordance with the CIS Act. Alterations to individually Recognised Schemes require the ‘approval’ of the Authority. No proposed change or alteration may take effect unless either the Authority has approved the proposal, or one month has elapsed since the date that notice was given and the Authority has not notified the manager or trustee that the proposed alteration is not approved.
When a Recognised Scheme wishes to cease recognition, the scheme’s representative in the Island should notify the Authority accordingly.
The Authority will want to ensure that there are no matters concerning the scheme or the Isle of Man investors that it should be aware of prior to the scheme ceasing recognition. In order to aid this process the scheme’s representative should inform the Authority:
how many Isle of Man investors are in the Scheme;
whether the Isle of Man investors have been notified that the scheme will no longer be recognised in the Island; and
whether such investors have been informed of where future enquiries may be addressed.
The Authority would wish to review a copy of the shareholder mailing prior to issue.
In the case of a scheme being liquidated or otherwise ceasing to be a scheme, the scheme’s representative in the Island should notify the Authority accordingly.