The Regulated Fund is an Isle of Man fund which has detailed regulations applying to it. Managers cannot be appointed to such a fund without the Isle of Man Financial Services Authority's ('the Authority') prior consent.
For forms applicable to Regulated Funds please click here.
Before a fund can be established as a Regulated Fund the proposed manager must request the Authority's consent to act for the fund. The Authority's consideration processes includes review of constitutional and offering documents, material agreements and review of the proposed functionaries.
Schedule 2 to the Collective Investment Schemes (Regulated Fund) Regulations 2010 (“the Regulations”) sets out the application process to establish a new Regulated Fund, change an existing Regulated Fund and appoint a new manager to an existing Regulated Fund.
Schedule 2 to the Regulations outlines in detail the application process to establish a new Regulated Fund in three stages. Briefly, this comprises:
- Outline stage – A fund manager may wish to seek approval in principle, subject to the receipt of acceptable documentation, to act as manager to a Regulated Fund. In order to seek approval in principle submission of an “Initial request to act as manager of a Regulated Fund” is required. This form should be completed and submitted in hard copy by the proposed manager.
If a proposed fund is at an advanced stage, an application may be processed more speedily by combining the Outline and Second stages, provided that the Part A and B forms and relevant documents are filed together.
Delays in submitted forms and information may delay the Authority's final consideration of a request.
- Second stage – A “Detailed request to act, or continue to act, as manager of a regulated fund” must be submitted. This form should be completed and submitted via the online portal (https://www.fscreturns.co.im) by the proposed manager along with relevant attachments, including -
- a copy of the scheme’s constitutional documents and in the case of a company, the certificate of incorporation;
- a copy of any investment management agreement or other document under which investment management is carried out (including schedule of fees);
- a copy of all material agreements;
- completed key person forms in respect of the members of the governing body of the scheme (see vetting guidance and vetting forms for more information);
- a copy of the proposed offering document;
- a marketing plan for the scheme covering three years or such longer period as, in the opinion of the manager, will be necessary to enable the scheme to become of a viable size in particular, the following details should be given:-
- in respect of a new scheme, its proposed launch date;
- how the units will be sold and to whom;
- the countries in which it is proposed that the units shall be marketed;
- any intended insurance link;
- the initial price of the units;
- the set-up charges and how these will be charged to the scheme; and,
- any minimum transaction size, both initially and subsequently if different.
- Third stage – Following review of all the relevant documentation highlighted above and receipt of satisfactory responses to the Authority's queries, consent for the manager to act to the Regulated Fund will be considered by the Authority. Final copies of documentation must be submitted and a Governing Body Responsibility Statement for a regulated fund must also be submitted via the online portal (https://www.fscreturns.co.im) in relation to the scheme particulars.
For a straightforward application, the approval process normally takes around two months, but in any event the Authority is required to inform the applicants of its decision not later than three months after the date on which the request was received. For the avoidance of doubt, this must be a complete request with all accompanying documentation in near final draft. Delays in submitted forms and information may delay the Authority's final determination of a request to act as manager to a regulated fund.
Schedule 2 to the Collective Investment Schemes (Regulated Fund) Regulations 2010 (“the Regulations”) details the Authority's approval process in respect of changes to existing Regulated Funds.
Any proposed alterations to an existing Regulated Fund, including any proposal to replace either the Manager or Fiduciary Custodian/Trustee, must be notified to the Authority by way of completion of a Detailed request to act, or continue to act, as manager of a regulated fund which should be completed and submitted via the online portal (https://www.fscreturns.co.im) by the fund Manager. Black lined versions of any revised draft fund constitutional documents, offering documents or material agreements must accompany this request.
If an alteration requires shareholders’ approval, a draft copy of the proposed resolution should be provided to the Authority for review and comment.
The Collective Investment Schemes (Regulated Fund) Regulations 2010 require that no offering document is issued to investors or potential investors unless, at the date it is issued to such persons, it is up to date. A revision of a scheme particulars document may take the form of a complete substitution or a supplement.
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. Following receipt of the Authority's approval to the alterations the Manager should arrange to provide copies of the final executed documents within 10 working days of their execution. A Governing Body Responsibility Statement for a regulated fund must also be submitted via the online portal (https://www.fscreturns.co.im) in relation to the new scheme particulars.
The Authority's prior approval is not required to wind-up a Regulated Fund. Nevertheless, the Authority expects that it will be notified via the online portal (https://www.fscreturns.co.im) of any proposals to wind up or close a Regulated Fund.
Winding up must take place in compliance with the constitutional documents and the winding-up procedure detailed within the fund’s offering document.
Shareholders should be notified and the draft communication should be shared with the Authority for review and comment. The Authority would expect audited accounts to be prepared for the fund for the final accounting period to the date of cessation.
Immediately prior to the fund ceasing to be a Regulated Fund, the Governing Body must submit an Annual Compliance Declaration to the Authority via the online portal (https://www.fscreturns.co.im). A template declaration can be found on the Forms page of the website here. Following cessation, the Authority will update the fund manager’s financial services licence conditions to remove reference to the ceased Regulated Fund.