The Isle of Man government has unveiled new regulations that will extend protected cell companies legislation to cover certain collective investment schemes.
The regulations provide for funds constituted as International Schemes including Experienced Investor Funds and Professional Investment Funds (but excluding Exempt International Schemes) in the Isle of Man to incorporate as, or convert into, protected cell companies, the Financial Supervision Commission revealed.
It is expected that the PCC concept, which provides statutory segregation through partitions (cells) within a company into which separate assets may be placed, will be of particular value for schemes which have a series of sub-funds, the FSC stated.
The liabilities of each cell are legally ring-fenced under Isle of Man law and cross contamination of cells is prevented, giving protection from risk arising from gearing, or otherwise, in other cells.
Coupled with the Isle of Man’s Experienced Investor Fund vehicle and initiatives launched during 2003, which included the removal of VAT from funds, the availability of protected cell companies as a structure for funds is another positive step forward for the Island, and comes at a time when international interest is growing both in the concept of PCCs and the use of the Isle of Man as a domicile for funds and fund administration.
The availability of PCC legislation for funds is seen as another boost to the Island’s growing funds industry, which added £1 billion in new assets during the second quarter of 2004 and over 40 new funds in the twelve months to 30th June 2004.
The Protected Cell Companies (Prescribed Class of Business) (Collective Investment Schemes) Regulations 2004 came into effect on 1st August 2004.
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