Who needs to be vetted?
All individuals that are to be appointed to "key roles" at a licenceholder must be notified to the Isle of Man Financial Services Authority (“the Authority”) in accordance with rule 7.9 (3) of the Financial Services Rule Book 2016. The equivalent requirement applies to individuals proposed for a key role with a licence applicant.
Vettable roles for licence applicants and licenceholders are controllers, directors and key persons. A key person is defined in section 48 of the Financial Services Act 2008; in summary, any person that has significant powers or responsibilities with respect to a regulated activity is classed as a key person.
Individuals to be appointed as a member of the governing body of an Authorised Scheme, Full International Scheme or Regulated Fund must also be notified to the Authority. The requirement for notifying the Authority of proposed appointments to the governing bodies of authorised schemes, full international schemes and regulated funds are set out at paragraph 3 of Schedule 1 of the Collective Investments Schemes Act 2008, paragraph 3 of Schedule 2 of the Collective Investments Schemes Act 2008 and paragraph 5(2) of the Collective Investment Schemes (Regulated Funds) Regulations 2010, respectively.
The Authority will carry out checks on the proposed appointees to assess their fitness and propriety. The assessment considers the integrity, competence and financial standing of the individual and i is described in more detail in the Authority’s Licensing Policy for Regulated Activities under the Financial Services Act 2008.
Which forms need to be submitted?
For licenceholders (and applicants), if an individual is being vetted by the Authority for the first time or is now being appointed to a key role with a "different" licenceholder, i.e. the individual has not previously been vetted, during their current period of employment with the licenceholder, a Personal Questionnaire ("PQ") needs to be completed.
If the individual is already in a key role with a licenceholder and the new role is with the same licenceholder, i.e. it is a change of role or an internal promotion, a Role Change Notification ("RCN") should be submitted. However, if the individual has submitted a PQ or RCN form, for a different key person role, within the last 6 months, details of the new role along with a letter, signed by the individual, advising of any changes to the individual’s circumstances will be accepted in place of the RCN form.
Individuals proposed as members of the governing body of an Authorised Scheme, Full International Scheme or Regulated Fund, should always complete a PQ.
The PQ and RCN forms are available from the Authority’s website. They can be completed online or handwritten, but please include an original signature on the form. Please also include any supporting documentation as noted on the "checklists" within the forms.
Please be aware, if individuals have any spent convictions, these do need to be disclosed but not necessarily in the key person form. Instead they can be disclosed to the Authorisations Division, under separate cover, directly by the individual. Receipt of these notifications will always be acknowledged, to the individual, by the Authorisations Division
The completed forms should be submitted through the licenceholder or licence applicant, or in relation to members of the governing body of an Authorised Scheme, Full International Scheme or Regulated Fund through the manager of the fund, and should be directed to the Authorisations Division at the Authority.
Criminal records checks
With effect from 1 April 2017, before a vetting application is submitted to the Authority a criminal records check should be undertaken. The licenceholder or licence applicant must complete the relevant section of the PQ or RCN confirming whether such a check has been undertaken and if so on what date. If no check has been undertaken, the reason for not doing so must be given in the PQ or RCN. Please note: the certificate itself must NOT be supplied to the Authority.
In order for a licenceholder or licence applicants 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 12 months of the date of the vetting form. If the criminal records check is less recent (or has not been undertaken), the licenceholder / licence applicant must provide reasons for this, and this rationale will form part of the Authority’s consideration of the individual’s fitness and propriety.
A criminal records check certificate may be obtained by one of the following four methods:
- The individual may request a Basic check themselves though the Disclosure and Barring Service, Disclosure Scotland or AccessNI. The certificate will be provided directly to the individual which should be made available to the regulated entity (or an applicant to become a regulated entity);
- Where a regulated entity, or an applicant to become a regulated entity is registered with the Isle of Man Vetting Bureau (of the Isle of Man Government), they may request that a Basic check is undertaken on an individual. The certificate will be provided to the requesting entity with a copy of the results also provided to the individual;
- If the individual has had a Basic, Standard or Enhanced check undertaken by another party within the last 12 months and the individual happy to share this with the employer; or
- If the individual is or has been resident outside the UK, please see the guidance at: https://www.gov.uk/government/publications/criminal-records-checks-for-overseas-applicants which will provide details of how to obtain a criminal records check from these jurisdictions.
Please note that the results from a Data Subject Access Request (or similar) made to the Isle of Man Constabulary, is not a substitute to undertaking a criminal records check.
The licenceholder or licence applicant should consider whether the details provided on the certificate issued by the checking body are consistent with the details stated by the individual within the Personal Questionnaire. The licenceholder or licence applicant should also consider whether the details on the certificate impact on its ability to confirm to the Authority that it is satisfied that the individual is fit and proper for the role in which they are proposed.
For the avoidance of doubt, if a licenceholder’s existing key staff do not take on any new key staff roles, the Authority does not expect criminal records checks to be routinely renewed.
As part of the standard checks completed by the Authority, a credit check will be undertaken. A reputable credit check agency in the UK will be used for this. For individuals that are, or have been, resident outside the UK, the Isle of Man and the Channel Islands and whose data will therefore not be available to the credit check agency, we will need a letter from their main bankers indicating how long they have banked with the institution and that the bank account has been run satisfactorily.
When should notification be given to the Authority?
As per the Financial Services Rule Book 2016 (Rule 7.9) the Authority must be notified at least 20 business days in advance of an appointment to a key role with licenceholder. The Authority expects that notification will be made by completing and submitting the relevant form.
In relation to Authorised Schemes, Full International Schemes and Regulated Funds, as per the Collective Investment Schemes Act 2008, the Authority views appointments to the governing body of such a fund as being a material event. As such the Authority should be notified of proposed appointments to an existing fund at least one calendar month before the appointment is expected to take effect. In relation to new funds the Authority should be notified of the proposed appointment when the fund documentation is submitted for review.
Please note, the Authority will generally return any key person forms that have not been completed correctly or are incomplete. The vetting process will only commence when a properly completed form, and relevant supporting documents, have been supplied.
The Authority will endeavour to complete its checks within 20 working days of receipt of the key person forms. However this standard can only be met if all the required information is provided when the form is submitted and the relevant third parties respond in a timely manner to the Authority’s request for references and confirmations.
Where, for any reason, the "fit and proper" checks cannot be completed within the 20 working day period, a licenceholder or fund, having satisfied the notification criteria, is able to appoint an individual to take up the key person position. However it should be made clear that such appointment is subject to the Authority raising “no objection” to the appointment once all the checks are complete.