On 30th August, the Isle of Man FSA announced the publication of a discussion paper which it says is relevant to all regulated entities, collective investment schemes, designated businesses, as well as functionaries and advisers to those sectors. The material amendments proposed include –
- To provide the ability for civil penalties to be imposed upon certain individuals, which is currently provided for under only one of the 4 Acts employed by the FSA;
- To make improvements and clarifications to the FSA powers of inspection and investigation – these include making it clear that powers of inspection (under all Acts) apply whether or not a breach is suspected; and that powers may be used also with regard to persons that are not regulated or are exempt from regulation;
- To prevent non-disclosure agreements (NDA) from constraining employees and others from informing the FSA of matters relevant to the FSA’s functions;
- To ensure that when an individual is presented for appointment to a Controlled Function for an existing regulated entity, or collective investment scheme, it is for the regulated entity to satisfy the FSA that the individual is fit and proper, rather than for the FSA to establish that they are not;
- To provide a direct investigation power into collective investment schemes – rather than having to rely on “indirect” routes to address such matters;
- To improve the provisions for winding up collective investment schemes established as companies;
- To add a requirement for Designated Businesses to be managed and controlled on the Isle of Man – as some such registered businesses have no presence on the Island apart from a registered office. This limits the effectiveness of the oversight regime, and gives rise to significant reputational risk to the Island;
- To provide for a civil penalty to be applicable where a Designated Business has failed to give notice of any change to the information required to be given to the FSA;
- To provide a power for the Authority to direct that an individual is not to be appointed as a specified person where that person is not fit and proper; and
- To provide a power for the Authority to warn an individual that their conduct may be prejudicial to their fitness and propriety.
Comments are invited by 31st October.
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