COLLECTIVE INVESTMENT SCHEMES (DEFINITION) ORDER 2017

Transcription

1 Colletive Investment Shemes (Definition) Order 2017 Artile 1 Statutory Doument No. 2017/0260 Colletive Investment Shemes At 2008 COLLECTIVE INVESTMENT SCHEMES (DEFINITION) ORDER 2017 Approved by Tynwald: 17 Otober 2017 Coming into Operation: 1 November 2017 The Isle of Man Finanial Servies Authority, after onsulting in aordane with setion 24(13) of the Colletive Investment Shemes At 2008, makes the following Order under setion 1(5) of that At. 1 Title This Order is the Colletive Investment Shemes (Definition) Order Commenement If approved by Tynwald 1, this Order omes into operation on 1 November Interpretation In this Order the At means the Colletive Investment Shemes At 2008; approved bank means () a person, in respet of whih a finanial servies liene issued under the Finanial Servies At 2008 is in fore, whih permits the arrying on of a regulated ativity falling within Class 1(1) or 1(2); and any person who is authorised under the law of a member state to arry on a business whih is a banking business for the purposes of that member state s law; or a firm authorised to arry on a banking or deposit-taking business under the law of any other ountry or territory whih is aeptable to the Authority; the Authority means the Isle of Man Finanial Servies Authority; 1 As required by setion 25 of the At. SD 2017/0260 Page 1

2 Artile 3 Colletive Investment Shemes (Definition) Order 2017 ash inludes foreign urreny; ertifiates representing seurities has the meaning given in Part 1 of Shedule 2 to the Regulated Ativities Order ; lose relative, in relation to an individual, means a hild, step-hild, parent, step-parent, brother, sister, step-brother, step-sister or spouse of that individual; losed-ended investment ompany means a body orporate () whih seeks to raise apital from partiipants for the primary purpose of investing that apital in aordane with a defined investment poliy; and in whih, under the douments onstituting the sheme, the rights of partiipants, represented by shares or seurities of that body orporate, are not redeemable out of funds provided by the losed-ended investment ompany at the eletion of the holders of the shares or seurities; but, for the avoidane of doubt, and unless the Authority provides prior onsent, an open-ended investment ompany shall remain open-ended for the purposes of this Order, despite subsequently beoming losed-ended; deposit has the meaning given in Part 1 of Shedule 2 to the Regulated Ativities Order 2011; funtionary inludes the governing body, a member of the governing body and a person appointed to provide servies to a olletive investment sheme, inluding (without limitation) a manager, administrator, fiduiary ustodian, trustee, ustodian, asset manager, investment adviser or promoter; governing body has the same meaning as in the At but also inludes the diretors of a sheme whih is a losed-ended investment ompany; Government and other publi seurities means investments within the meaning given in Part 1 of Shedule 2 to the Regulated Ativities Order 2011, and whih are issued by or on behalf of () (d) the Government of the Island, or of a member state; a loal authority in the Island or in any member state; the Government of any ountry or territory; or an international organisation the members of whih inlude a member state, 2 SD 2011/0884 as amended by SD 2013/0373 and SD 2016/0188 Page 2 SD 2017/0260

3 Colletive Investment Shemes (Definition) Order 2017 Artile 3 and inludes investments whih would fall within the meaning given in Part 1 of Shedule 2 to the Regulated Ativities Order 2011 if that Part extended to investments guaranteed by the Government of the Island; near ash means money, deposits or investments whih fall within any of the following () (d) (e) (f) money deposited with an approved bank whih is in: a urrent aount; or a deposit aount, if the money an be withdrawn immediately and without payment of a penalty exeeding 7 days interest alulated at ordinary ommerial rates; ertifiates of deposit issued by an approved bank if immediately redeemable at the option of the holder; Government and other publi seurities, if redeemable at the option of the holder or bound to be redeemed within 2 years; a bill of exhange issued by any Government or body whih is the issuer of a Government and other publi seurity; deposits with a loal authority of a kind whih fall within paragraph 9 of Part II of Shedule 1 to the Trustee Investments At of Parliament, and equivalent deposits with any loal authority in a member state, if the money an be withdrawn immediately and without payment of a penalty as desribed at above; and investments of a kind desribed in paragraphs 1 and 2 of Shedule 1 to the Trustee Investments At 1961 of Parliament, and equivalent investments whih are issued or guaranteed by any Government of a ountry or territory; member state means a member state of the European Union or of the European Eonomi Area; seurities has the meaning given in Part 1 of Shedule 2 to the Regulated Ativities Order 2011; units has the same meaning as in the At and also inludes shares or seurities in a losed-ended investment ompany; and US$ means United States Dollars and its equivalent in any other urreny, and a figure expressed in US$ inludes its equivalent value in that other urreny SD 2017/0260 Page 3

4 Artile 4 Colletive Investment Shemes (Definition) Order Charateristis of arrangements whih do not amount to a olletive investment sheme under setion 1 of the At Arrangements do not amount to a olletive investment sheme if () the property to whih the arrangements relate (other than ash awaiting investment) onsists of shares, debentures, government seurities, instruments, ertifiates representing seurities, longterm insurane or units in relation to authorised or reognised olletive investment shemes (as those terms are defined in Part 1 of Shedule 2 to the Regulated Ativities Order 2011); eah partiipant is the owner of a part of that property and entitled to withdraw it at any time; and the arrangements do not have the harateristis mentioned in setion 1(3) of the At and have those mentioned in setion 1(3) only beause the parts of the property belonging to different partiipants are not bought and sold separately exept where a person beomes or eases to be a partiipant. 5 Arrangements whih do not amount to a olletive investment sheme under setion 1 of the At (1) The following are not olletive investment shemes () arrangements operated by a person otherwise than by way of business; arrangements where eah of the partiipants arries on a business (other than investment business as that term is defined in Class 2 of Shedule 1 to the Regulated Ativities Order 2011) and enters into the arrangements for ommerial purposes related to that business; arrangements where eah of the partiipants is a body orporate in the same group as the governing body, manager or administrator; (d) arrangements where eah of the partiipants is a bona fide employee or former employee (or the wife, husband, widow, widower, hild or step-hild under the age of eighteen of suh an employee or former employee) of a body orporate or of another body orporate in the same group as that body orporate; and the property to whih the arrangements relate onsists of ash or near ash or of seurities in or of a member of that group; Page 4 SD 2017/0260

5 Colletive Investment Shemes (Definition) Order 2017 Artile 5 (e) (f) (g) (h) (j) (k) (l) (m) arrangements where the entire ontribution of eah partiipant is a deposit or a sum (iii) (iv) paid by a deposit taker; paid by a person in the ourse of arrying on a business onsisting wholly or mainly of lending money; paid by one ompany to another at a time when the same person would be treated as the ontroller of both of them if, in the definition of ontroller in setion 26 of the At, the perentage referred to in paragraph (d) of that definition was 50 per ent; or whih is paid by a person who, at the time when it is paid, is the spouse or a lose relative of the person reeiving it or who is, or is the spouse or a lose relative of, a diretor or ontroller of that person; franhise arrangements, that is to say, arrangements under whih a person earns profits or inome by exploiting a right onferred by the arrangements to use a trade name or design or other intelletual property or the good-will attahed to it; arrangements the predominant purpose of whih is to enable persons partiipating in them to share in the use or enjoyment of a partiular property or to make its use or enjoyment available gratuitously to other persons; arrangements under whih the rights or interests of the partiipants are ertifiates representing seurities ; arrangements the purpose of whih is the provision of learing servies and whih are operated by an authorised person, a reognised learing house or a reognised investment exhange; ontrats of insurane; oupational pension shemes; a limited partnership formed under the law of the Island whose interests are admitted to the Offiial List of the UK Listing Authority, and in this paragraph interests means limited partnership interests of an irredeemable nature however termed; and depositary reeipts or similar ertifiates representing suh interests; or bodies inorporated under the law of the Island, or of, or of any part of, the United Kingdom, relating to building soieties, redit unions or industrial and provident soieties or registered under any suh law relating to friendly soieties. SD 2017/0260 Page 5

6 Artile 5 Colletive Investment Shemes (Definition) Order 2017 (2) But, without prejudie to the generality of (1), a body orporate will be a olletive investment sheme under setion 1 of the At if it meets the provisions of setion 1 of the At, and also meets the provisions of, or () it is an open-ended investment ompany; it is a losed-ended investment ompany and () its units are not listed or admitted to trading on a seurities market supervised for the purposes of market abuse by an Ordinary Member of the International Organization of Seurities Commissions; and its units are promoted by, or on behalf of, its board in suh a way that it is intended to be available for partiipation by the publi or any setion of it; or not without the prior onsent of the Authority, it is a losed-ended investment ompany that does not meet the desription in (2) but it has nevertheless eleted, by a majority of partiipants onstituting at least 75% of the total number of votes ast, to be a olletive investment sheme in the douments onstituting the ompany. (3) For the purposes of (2) and (5), if the douments onstituting the ompany prohibit offers to the publi or any setion of it and the number of partiipants is limited to a maximum of 49; or there is a minimum initial investment level for its units of at least US$ 100,000 for eah partiipant, a losed-ended investment ompany s units are not intended to beome available for partiipation by the publi or any setion of it. (4) For the purposes of (2) and (5), and without prejudie to the generality, the following shall not be onsidered to be the publi or any setion of it a person, body orporate, partnership, trust or other uninorporated assoiation whose ordinary business or professional ativity inludes aquiring, underwriting, managing, holding or disposing of investments, whether as prinipal or agent, or giving advie about investments; () (d) any diretor or partner of or onsultant to a person referred to in ; a funtionary, or an assoiate of a funtionary, to the losed-ended investment ompany; an employee, diretor or shareholder of, or onsultant to a person in (), who is aquiring the investment as part of his Page 6 SD 2017/0260

7 Colletive Investment Shemes (Definition) Order 2017 Artile 6 (e) (f) (g) (h) remuneration, or an inentive arrangement or by way of oinvestment; a trustee of a family trust settled by or for the benefit of, one or more persons referred to in () or (d); a trustee or operator of any employment benefit or exeutive inentive sheme, or trust established for the benefit of persons referred to in () or (d), or their dependents; a government, loal authority, publi authority or supra national body in the Isle of Man or elsewhere; a ompany, partnership, trust or other assoiation of persons whih has (or whih is a wholly owned subsidiary of a body orporate whih has) assets of at least US$1,000,000 available for investment; an individual with a net worth, or joint net worth with their spouse, greater than US$ 1,000,000, exluding their prinipal plae of residene. (5) For the avoidane of doubt, and despite (2), a losed-ended investment ompany established before the oming into operation of this Order ( that date ) shall only be a olletive investment sheme if it aepts investments in units from the publi or any setion of it, or persons who are not existing holders of units in the losedended investment ompany on or after that date; or it elets to beome a olletive investment sheme under 2() on or after that date. 6 Revoation The Colletive Investment Shemes (Definition) Order is revoked. MADE 15 SEPTEMBER 2017 KAREN BADGEROW Chief Exeutive of the Isle of Man Finanial Servies Authority G.F. KARRAN Member of the Isle of Man Finanial Servies Authority 4 SD 462/2008 SD 2017/0260 Page 7

8 Explanatory Note Colletive Investment Shemes (Definition) Order 2017 EXPLANATORY NOTE (This note is not part of the Order) This Order speifies the type of arrangements whih do not amount to a olletive investment sheme under setion 1 of the Colletive Investment Shemes At Page 8 SD 2017/0260