A licence to carry on the Class 2 regulated activity of
investment business includes arranging deals in investments;
providing administration; and safeguarding of
The term 'investment' includes traditional investment instruments as well as derivatives.
There are certain exemptions from the licensing requirements. These are contained in the Regulated Activities Order 2008 and the Financial Services (Exemption) Regulations 2008.
Full details can be obtained from the Financial Supervision Commission.
Applicants for a Class 2 Investment Business licence must have an established track record of profitable operation, and ownership and management must be acceptable to the Commission (see The Financial Supervision Commissions's General Licensing Policy).
Financial Services Rule Book 2008
Businesses are required to adhere to the Financial Services Rule Book 2008, which covers all aspects of their business - such as solvency, submission of regular financial reports, accounting standards and compliance reporting.
All investment businesses are required to follow customer due diligence policies in order to minimise the possibility of being unwittingly used in laundering the proceeds of drug trafficking, terrorism or other criminal activities.