The Isle of Man is an attractive location for establishment of a new fund due to its international standards of regulation and the breadth and depth of professional experience available to support you. The Isle of Man Wealth & Fund Services Association members have a wealth of experience in administering and advising a range of fund structures and an overview of the key fund types that can be established in the Isle of Man is given below.
RETAIL TYPE SCHEMES
Authorised Schemes
Authorised Schemes are funds that are subject to detailed and prescriptive regulation and which are capable of promotion to the general public in the Isle of Man, and elsewhere as permitted by the prevailing legislation. These funds are suitable for promoters requiring a retail investment product benefiting from a high degree of investor protection. Investors in authorised schemes are covered by a compensation scheme. Authorised schemes must be vetted and approved by the regulator prior to launch.
Regulated Schemes
Regulated Schemes are funds that are subject to FSA regulation and which are capable of promotion within and outside of the Isle of Man, (subject to host jurisdiction rules). Regulated Schemes can be suitable for both retail and institutional investors and can apply for secondary listings on recognised exchanges such as CISX and the ISE. Regulated schemes must be vetted and approved by the regulator prior to launch.
PROFESSIONAL TYPE SCHEMES
Specialist Fund
The Isle of Man has a full suite of fund options, but the fund category of choice for institutional alternative investment is the new Specialist Fund, or "SF". The Specialist Fund aims to mirror the Cayman exempted company fund structure and has a minimum $100k initial investment criteria. The Specialist Fund is not subject to regulatory pre-approval.
Qualifying Fund
The new Qualifying Fund or "QF" is the ideal solution for distribution to non-retail investors, offering maximum flexibility on strategy and asset allocation with no minimum investment as long as they are sold via suitably qualified intermediaries. The Qualifying fund is not subject to regulatory pre-approval.
PRIVATE SCHEMES
Exempt International Schemes
Exempt International Schemes are unregulated private funds which cannot be marketed to the public and are restricted to having no more than 49 participants, within these criteria these schemes fall outside of collective investment legislation in the IoM and are therefore easy and quick to establish, requiring no vetting or ongoing oversight from the regulatory body. These funds are generally suitable for use by small groups of investors such as family offices and start-up managers when ‘own money' is used to build a track record and wide promotion and extensive regulation are unnecessary.
Closed-Ended Companies - Suitable for AIM listings
Closed ended companies fall outside of the Island's Financial Services legislation and are therefore relatively quick to establish. However, they are another vehicle for collective investment, and can be particularly appropriate for venture capital, private equity, private companies or property investment, all of which maybe illiquid and require longer term investment commitment. (Open ended funds are therefore the opposite kind of investment as investors usually have the right to withdraw their capital at short notice and at frequent intervals).
OVERSEAS SCHEMES
The Isle of Man is home to the administration of many non-IoM domiciled schemes. The Isle of Man does not seek to impose any form of dual regulation on these schemes which may be domiciled in alternative jurisdictions - ie Cayman/ BVI/ Bermuda etc. The Isle of Man provides a stable jurisdiction in a European time zone where professional services can be undertaken to encompass all of the back-office administration including secretarial, shareholder registry, valuation and accounting services.