Regulation & Legislation
A licence to carry on the Class 2 regulated activity of investment business includes advising on and dealing in investments; arranging deals in investments; managing investments belonging to another person; providing administration; and safeguarding of investments. The term 'investment' includes traditional investment instruments as well as derivatives.
There are certain exemptions from the licensing requirements and 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 General Licensing policy at www.fsc.gov.im). 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.