Banks, Collective Investment Schemes, Insurance Companies and Pension Providers
Banks
The Financial Supervision Commission determines applications for banking licences and supervises the
activities of banks.
Two kinds of banks may be licensed:
- ‘Domestic banking institutions’, which must (under present policy) be subsidiaries or
branches of banks set up in other jurisdictions.
- ‘Offshore managed banks’ - where a domestic banking institution is appointed the
bank’s manager in the Isle of Man.
There is a depositors’ protection scheme for the compensation of depositors in Isle of Man banks.
The scope of this website precludes giving detailed information on the application for a banking
license. To maintain the Island’s high reputation in this area, the licensing procedure is carried
out thoroughly and quarterly returns and audited accounts are required to be submitted to the Financial
Supervision Commission.
Collective Investment Schemes
Collective Investment Schemes (and other investment businesses) are also supervised by the Financial
Supervision Commission. There are regulations relating to the constitution and management of schemes,
the powers and duties of the operator and trustee and the rights and obligations of the participants.
There are, broadly, five classes of schemes:
- an ‘authorised’ scheme;
- an ‘international’ scheme - which may not be promoted or advertised in the Isle of Man;
- an ‘international restricted’ scheme - which may or may not be promoted or advertised
in the Isle of Man, which has fewer than fifty participants and which is not open to the public;
- a ‘professional investor fund’ - aimed at professional investors or ‘high net
worth’ individuals; and
- an ‘experienced investor fund’ - aimed at experienced investors but lacking some of the
restrictions applying to a professional investor fund.
Insurance Companies
The insurance market is carefully regulated and consists of the local market for normal insurance risks
and the offshore captive insurance and reinsurance market.
Insurance activities are supervised by the Insurance and Pensions Authority. Detailed information on
the making of an application to carry on insurance business is outside the scope of this website. The
details of requirements for applications for licenses vary slightly according to the nature of the
business sought to be carried out and a licence specifies the authorised class(es) of business.
Quarterly returns and audited accounts must be provided to the Insurance Supervisor. A statutory
policyholders’ compensation scheme has been established.
Pension Providers
A ‘light touch’ regulatory environment has been created in relation to the establishment
and operation of international occupational pension schemes. The regulation focuses on the trustee and the
manager rather than the schemes themselves.
A proposal document has been launched in the Isle of Man which is designed to provide greater
flexibility in the provision of pension schemes for the benefit of both residents and non-residents. Key
aspects of the document include:
- The purchase of annuities for a personal pension will be a choice not a statutory rule;
- Changes as to how funds can be withdrawn;
- The extension of investments permitted by a scheme which may include property;
- An increase in the possible lump sum withdrawn to 30% of the scheme and removing the maximum amount
of £150,000 available for withdrawal;
- Increase in the annual contributions allowance to £300,000 reviewed annually.