The definition of the activities which constitute investment business is contained in the Investment Business Order 2004 and includes dealing in investments; arranging deals in investments managing investments; giving investment advice and acting as the manager or trustee of collective investment schemes or providing administrative services to such schemes.  The term 'investment' includes the traditional investment instruments as well as futures and options.  Life and pensions products are also classed as investments, but land and cash are not.

There are certain exemptions from the licensing requirements of Section 3 of the Investment Business Act.  The exemptions include licensed banks, building societies, member firms of the Law Society of England and Wales, member firms of the Isle of Man Law Society and member firms of the Institute of Chartered Accountants in England and Wales and covered by Mutual Assistance Arrangements with those bodies.  It is those bodies who will be responsible for ensuring day-to-day compliance with the Regulations.

The Mutual Assistance Agreement between the Securities and Futures Authority Limited ('SFA') in the UK and the Commission under which the SFA undertook compliance visits on Isle of Man stockbrokers on behalf of the Commission was terminated with effect from 31st March 1996.  As a consequence, with effect from 1st April 1996, Isle of Man stockbrokers are required to be licensed under the Investment Business Acts 1991 to 1993.

Applicants for an Investment Business Licence must have an established track record of at least three years profitable operation, and ownership and management must be acceptable to the Commission.  Investment businesses are required to adhere to a number of regulatory codes which cover all aspects of their business and are required to submit financial reports to the Financial Supervision Commission at either quarterly or half-yearly intervals, dependent upon the type and level of business being conducted.

All investment businesses are expected to exercise a 'Know Your Customer' policy in order to minimize the possibility of being unwittingly used in laundering the proceeds of drug trafficking or other criminal activities.