A Fiduciary Service Provider (FSP) is defined as 'a person who, by way of business, engages in a regulated activity.'

It is an offence, in or from within the Isle of Man, to act as or holds oneself out to be a FSP without a FSP licence.  The requirement to hold a FSP licence also applies to an Isle of Man incorporated company that conducts FSP business outside the Island.  Providers are required to conduct their business in accordance with regulatory codes to the highest professional standards.

The Fiduciary Services Acts 2000 and 2005 are the statutory basis for regulating fiduciaries.  The Corporate Service Providers Act 2000 as amended by the Fiduciary Services Act 2005 is the primary legislation relating to the regulation by the Financial Supervision Commission of the activities of fiduciaries.  The two Acts are collectively known as the Fiduciary Services Acts 2000 and 2005.

Regulated Activities

Broadly, corporate services include the formation and supplying of companies to clients; acting as a director, secretary or shareholder of client companies; the provision of registered office facilities or accommodation addresses; and the provision of company administration services for client companies.

Trust Services include acting as a trustee, protector or enforcer of an express trust and the provision of trust administration services.

Categories of Fiduciary Licences

A fiduciary licence is designated by the class of activity to which it refers, which may be either CSP or TSP.  The classes are further subdivided (as below) depending on the particular regulated activities the licenceholder is licensed to undertake. 

1) Category 1 CSP Licence
2) Category 2 CSP Licence
3) Trust Corporation Licence
4) Category 1 TSP Licence
5) Category 2 TSP Licence

A business may hold either a CSP or TSP licence or both of the relevant categories.  A Trust Corporation licence is restricted to bodies corporate and a Category 2 CSP or TSP licence is restricted to individuals.

Exemptions from the requirement to hold a FSP licence

The exemptions from the requirement to hold a FSP licence are listed in Schedule 2 to the Fiduciary Services Act and include the following:

a) Certain professional services provided by an accountant, an advocate or a registered legal practitioner (within the meaning of the Legal Practitioners Registration Act 1986). For example, an advocate is not required to hold a FSP licence when giving legal advice or preparing minutes in his professional capacity; or by an accountant when giving accountancy or tax advice, or keeping accounting records, preparing and auditing the accounts of a company.  An advocate, accountant or registered legal practitioner is also exempted from the requirement to hold a FSP licence in respect of the preparation and submission of documents required to be submitted under the Companies Acts 1931 to 2004 and the Companies Act 2006, provided that the regulated activity is undertaken as part of or incidental to another professional activity.

b) Regulated activities provided for domestic businesses that carry on their sole or principal trade in the Isle of Man and are resident in and have a permanent establishment in the Island.  The domestic services exemption also refers to any regulated activity undertaken for the holders of investment business, banking and FSP licences, authorised building societies and insurance businesses and registered insurance intermediaries, under the relevant Isle of Man legislation.

c) A regulated activity undertaken intra-group or by a participator in a joint enterprise, for another member of the group or joint venture and not for an outside third party.

d) An introduction made to a FSP licence holder.

e) In certain circumstances, acting as a director or secretary of a company are also exempted, for example, in respect of a company that is owned by that person or by his family, or of a company listed on a recognised stock exchange.

The Commission's Licensing Policy for FSPs

A FSP licence holder and its key staff are required to be fit and proper persons.  The Commission's licensing policy is to apply a test of fitness and properness in the key areas of integrity, competence and solvency.  Click here for more details of the Commission's licensing policy.

FSP licence holders are required to comply with regulatory codes as follows:-

Fiduciary Services (General Requirements) Regulatory Code 2005

The Fiduciary Services (General Requirements) Regulatory Code 2005, contains the general requirements for the conduct of FSP business in a number of areas such as:

a) ' Know your customer'
b)  Client agreements / terms of business
c)  Dual control (the '4-eyes' criterion)
d)  Compliance systems, procedures and returns
e)  Provision of directors
f)  Financial resources, going-concern and reporting requirements
g)  Matters to be notified to the Commission
h)  Complaints
i)  Avoidance of conflicts of interest
j)  Advertising
k)  Professional indemnity insurance cover

Fiduciary Services (Clients' Money and Trust Money) Regulatory Code 2005

The Fiduciary Services (Clients' Money and Trust Money) Regulatory Code 2005 requires that clients' money and trust money (as defined in the code) must be held on trust for the client or client's company and must be segregated from the FSP's own moneys.  The code also sets out the operational procedures for handling clients' money and the requirements for the payment of interest on clients' and trust money.

Acknowledgement: Financial Supervison Commission

Contact Details:

Financial Supervision Commission
PO Box 58
Finch Hill House
Douglas
Isle of Man
IM99 1DT
British Isles

TEL NO: +44 (0) 1624 689317

FAX NO: +44 (0) 1624 689398

EMAIL: info@fsc.gov.im

Please click on the Financial Supervision Commission logo for a link to their own website.