The Isle of Man Financial Supervision Commission (FSC) has published a revised version of its General Licensing Policy for those seeking a banking, investment business or fiduciary services licence.
The revisions affect licencees in three areas: 2006 Act companies, sole traders and partnerships, and custodians of collective investment schemes.
The FSC said that companies registered under the Companies Act 2006 may be licensed as investment businesses or fiduciaries, subject to specified requirements to ensure an appropriate level of transparency and corporate governance, which would be applied through binding licence conditions.
2006 Act companies may not hold banking licences however, because such companies can reduce their share capital without the need to apply to the Courts.
The Insurance and Pensions Authority is also examining the possible uses of 2006 Act companies for businesses authorised or registered by the Authority with a view to permitting their use in certain circumstances and with appropriate safeguards in place to ensure comparable levels of transparency and corporate governance. The Authority said that it will be issuing further details in this regard shortly.
These restrictions on 2006 Act companies will apply only to licence applicants and licence holders, and not to other 2006 Act companies.
Existing sole trader and partnership licence holders may continue to operate. However, the Commission has decided to cease to license new sole traders or partnerships (except for a restricted category of fiduciary licence that is designed for natural persons only).
Custodians of certain types of collective investment scheme may now operate under a category 3 group (b) or a category 5 investment business licence.
The Commission is currently consulting the fund management industry in relation to the use of 2006 Act companies as vehicles for the operation of collective investment schemes.
The Isle of Man's Companies Act 2006 came into force on November 1, and the first New Manx Vehicles, or '2006 Act companies' as they are now known, were incorporated on the same day. Each 2006 Act company is allocated a number followed by the suffix “V” to distinguish the new-style companies from the more traditional companies which may still be incorporated under the Companies Acts 1931-2004.
A comprehensive report in our Intelligence Report series looking at offshore and onshore corporate structures and their tax implications is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report7.asp
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