Financial Services (Exemptions) Regulations 2011

Financial Services (Exemptions) Regulations 2011 Regulation 1 c SD No. 2011/0885 Page 1 Statutory Document No. 2011/0885 Financial Services Act 2008 c FINANCIAL SERVICES (EXEMPTIONS) REGULATIONS 20111 Approved by Tynwald: 13 December 2011 Coming into Operation: 1 January 2012 The Financial Supervision Commission, after carrying out the consultations required by
section 44(5) of the Financial Services Act 2008, makes these Regulations under
sections 44(2) and (3) of that Act.
1 Title
These are the Financial Services (Exemptions) Regulations 2011.
2 Commencement
If approved by Tynwald, these Regulations come into operation on 1 January 2012. 3 Interpretation (1) In these Regulations — “the Act” means the Financial Services Act 2008; “the Order” means the Regulated Activities Order 201l1 ; “section 4” means section 4 of the Act (prohibition of regulated activity except in accordance with a licence); (a) References in these Regulations to activities of Class 3 which are defined in the Collective Investment Schemes Act 2008 have the same meanings as in that Act; (b) other expressions have the meanings given by Schedule 3. (2) References in these Regulations to a numbered class or to a numbered paragraph of such a class, are to the class of regulated activities so numbered in Schedule 1 to the Order or to the paragraph so numbered of that class as the case may be.

1 0884/11

Regulation 4 Financial Services (Exemptions) Regulations 2011
Page 2 SD No. 2011/0885 c
4 Exemptions : general
Schedule 1 exempts persons that do not hold a licence issued under section 7 of
the Act (issue of a licence) in respect of a particular class of regulated activity from the requirements of section 4 of the Act (prohibition of regulated activity except in accordance with a licence) in the circumstances there specified.2 5 Exemption : Use of equipment on the Island
Schedule 2 exempts from the requirements of section 4 the persons, and in the
circumstances, there specified.
6 Revocation
The Financial Services (Exemptions) Regulations 20092 and the Financial Services (Exemptions) (Amendment) Regulations 20103 are revoked. MADE 4 NOVEMBER 2011

2 SD 739/09
3 SD 883/10

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 3
SCHEDULE l
Regulation 4.
EXEMPTIONS FROM LICENSING
CLASS 1 - DEPOSIT TAKING
Company officers and employees

1. In relation to a regulated activity of Class 1, section 4 does not apply to an
   individual who —
   (a) is not an employee, director or other officer of a company licensed to carry on activities of Class 1 (“the licenceholder”), but (b) is an employee, director or other officer of another company in the same group as the licenceholder, and (c) carries on that activity under the direction of and in the course of business of the licenceholder. CLASS 2 - INVESTMENT BUSINESS Liquidators, receivers etc.
   2.1 (1) In relation to a regulated activity of Class 2, section 4 does not apply to a
   person whilst acting in his capacity as —
   (a)
   (i) a liquidator or provisional liquidator of a licenceholder, provided that person complies, where appropriate, with the condition specified in sub-paragraph (2); or (ii) a liquidator or provisional liquidator of any other company or limited partnership; and any individual acting under the control or direction of a liquidator or provisional liquidator; (b) a receiver or manager appointed in respect of any of the assets of a company or limited partnership; (c) a trustee in bankruptcy; (d) the trustee of a composition or scheme of arrangement if appointed or approved by the High Court; (e) receiver of a patient; or (f) personal representative of a deceased person. (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.3

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Certificates of deposit
2.2 In relation to a regulated activity of Class 2, section 4 does not apply to a person
whose activities within that class are restricted solely to certificates of deposit. Tied agents of friendly societies
2.3 In relation to an activity falling within paragraph (3) or (7) of Class 2, section 4
does not apply to a person whilst acting as a tied agent of a body which is registered as a friendly society under an enactment having effect in the Island or any part of the United Kingdom, where that person — (a) does not in the course of his business receive clients’ money; (b) does not carry on any activity falling within Class 2 other than arranging deals for or giving advice to existing members of the friendly society or members of organisations associated with that friendly society (for example trade unions); and (c) does not deal in or give advice on any product which is not offered by the friendly society to which he is tied. Enduring powers of attorney
2.4 In relation to an activity falling within paragraph (2), (3) or (4) of Class 2, section 4
does not apply to a person whilst acting under an enduring power of attorney where — (a) that power has been registered under section 6 of the Powers of Attorney Act 1987; and (b) the attorney has entered into a discretionary management agreement with either — (i) a licenceholder, or (ii) a person authorised to undertake that activity by a regulator. Bearer instruments - ‘post office’ facility
2.5 In relation to an activity falling within paragraph (1) to (5) of Class 2, section 4
does not apply to a person whilst safeguarding bearer instruments of title to investments, subject to the condition that any such instrument is removed from the possession of that person by close of business on the business day following the receipt of the instrument. Company pension schemes
2.6 In relation to a regulated activity of Class 2, section 4 does not apply to a person
whose activities within that class are restricted to pension schemes, the beneficiaries of which are employees, former employees or the dependants of employees or former employees of —

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 5 (a) the person by whom the activity is carried on, or (b) a company in the same group as that person. Nominee companies
2.7 (1) In relation to an activity falling within paragraph (2), (3) or (5) of Class 2,
section 4 does not apply to a nominee company which is a directly and wholly-owned
subsidiary of a person licensed to carry on that activity (“the licenceholder”), where — (a) the licenceholder is permitted by its licence to control clients’ money or assets; (b) the activity is carried on by the nominee company solely on behalf of companies which are in the same group as the nominee company and are licensed to carry on that activity; (c) the nominee company complies with the relevant provisions of the Rule Book relating to nominee bank accounts and clients’ investments; and4 (d) the licenceholder arranges for a Clients’ Assets Report, complying with the requirements of rule 8.23(2) of the Rule Book, to be prepared annually and, when required by the Authority, to be reviewed by the licenceholder’s auditor and submitted to the Authority at a frequency to be determined by the Authority.5 (2) In relation to an activity falling within paragraphs (2), (3) or (5) of Class 2,
section 4 does not apply to a nominee company which is a directly and wholly‐owned
subsidiary of a person licensed to carry on activity falling within paragraphs (1), (2) or (11) of Class 3 (“the Class 3 licenceholder”), where, — (a) the nominee company is providing services to participants in relevant schemes; (b) the nominee company complies with the relevant provisions of the Rule Book relating to nominee bank accounts and clients’ investments; and6 (c) the Class 3 licenceholder arranges for a Clients’ Assets Report, complying with the requirements of rule 8.23(2) of the Rule Book, to be prepared annually and, when required by the Authority, to be reviewed by the licenceholder’s auditor and submitted to the Authority at a frequency to be determined by the Authority.7 8 (3) [Revoked]9 (3) For the purposes of this paragraph, “relevant schemes” means collective investment schemes for which the Class 3 licenceholder acts as manager, administrator, trustee, fiduciary custodian or custodian.10

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Company officers and employees
2.8 In relation to a regulated activity of Class 2, section 4 does not apply to an
individual who —
(a) is not an employee, director or other officer of a company licensed to carry on activities of Class 2 (“the licenceholder”), but (b) is an employee, director or other officer of another company in the same group as the licenceholder, and (c) carries on that activity under the direction of and in the course of business of the licenceholder. Public authorities
2.9 In relation to regulated activity of Class 2, section 4 does not apply to —
(a) a Department,
(b) a Statutory Board, or
(c) a local authority or joint board.
Crowdfunding platforms11
2.10 In relation to an activity falling within paragraph (3) or (5) of Class 2, section 4
does not apply to a person operating investment-based crowdfunding services, provided that the person is licensed under Class 6(2) (crowdfunding platforms).12 CLASS 3 - SERVICES TO COLLECTIVE INVESTMENT SCHEMES Nominee companies
3.1 In relation to a regulated activity of Class 3, section 4 does not apply to a nominee
company which is a directly and wholly-owned subsidiary of a person licensed to carry on an activity falling within paragraphs (1) to (5) or (11) of Class 3, where — (a) the parent company is licensed to carry on the regulated activities that the nominee company is undertaking; (b) the nominee company complies with the provisions of the Rule Book relating to clients’ money and clients’ investments; and (c) the nominee company arranges for an annual audit report complying with the requirements of paragraph 2.7(3) to be sent to the Authority. 13 Managers etc. of exempt schemes and exempt-type schemes
3.2 (1) In relation to a regulated activity falling within paragraph (11) of Class 3
consisting of services provided to an exempt scheme or an exempt-type scheme (“the scheme”), section 4 does not apply to a person carrying on that activity where —

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 7 (a) the exempt person provides those services to no more than one exempt scheme or exempt-type scheme, and (b) the conditions specified in — (i) sub-paragraph (2); or (ii) sub-paragraph (3), are met.14 (2) The conditions referred to in sub-paragraph (l)(b) are that, in accordance with an agreement between the exempt person and a person licensed to carry on activities falling within paragraph (12) of Class 3 (“the licenceholder”) — (a) the exempt person is responsible for providing sufficient information to the licenceholder about the exempt person and the scheme to enable the licenceholder to satisfy itself that the criteria in sub-paragraph (4) are met; and15 (b) the licenceholder is responsible for satisfying itself, on the basis of information provided pursuant to (a) above and any other information in the possession of the licenceholder, that those criteria are met. (3) The conditions referred to in sub-paragraph (1)(b)(ii) are that — (a) the exempt person is responsible for satisfying itself that the criteria in sub-paragraph (4) are met; and (b) no person in the same economic group as the exempt person is acting in the same capacity in relation to an exempt scheme or exempt-type scheme.16 (4) The criteria referred to in sub-paragraphs (2) and (3) are that — (a) the exempt person continues to comply with the requirements of paragraph (l)(a); and (b) the scheme continues to comply with the requirements of paragraph l(l)(a) and (b) of Schedule 3 to the Collective Investment Schemes Act 2008.17 Exempt managers of experienced investor funds and professional investor funds
3.3 (1) In relation to a regulated activity of Class 3, section 4 does not apply to the
manager of a scheme which is —
(a) an experienced investor fund within the meaning of the Financial Supervision (Experienced Investor Fund) (Exemption) Order 19994 ; or

4 SD 603/99 as amended by SD 407/00, 87/03, 347/03 and 806/07

SCHEDULE l Financial Services (Exemptions) Regulations 2011
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(b) a professional investor fund within the meaning of the Financial Supervision (Professional Investor Fund) (Exemption) Order 19995 ; where the conditions specified in sub-paragraph (2) are met. (2) The conditions referred to in sub-paragraph (1) are that, in accordance with an arrangement between the manager and a person licensed to carry on activities falling within paragraph (9) of Class 3 (“the licenceholder”) — (a) all activities of the manager in relation to the scheme that would (apart from this paragraph) constitute regulated activities of Class 3 are delegated to the licenceholder; (b) no activity of the manager in relation to the scheme, other than the termination of a delegation under condition (a) above, may be carried on by the manager without the prior written approval of the licenceholder; (c) the manager may only introduce subscribers to the scheme where a director of the licenceholder is also a director of the manager; (d) the licenceholder may perform any function or activity on behalf of or in the name of the manager that a manager would normally undertake as manager of a scheme of the kind referred to in paragraph (l)(a) or (b), as the case may be. Company officers and employees
3.4 In relation to a regulated activity of Class 3, section 4 does not apply to an
individual who —
(a) is not an employee, director or other officer of a company licensed to carry on activities of Class 3 (“the licenceholder”), but (b) is an employee, director or other officer of another company in the same group as the licenceholder, and (c) carries on that activity under the direction of and in the course of business of the licenceholder. Liquidators and receivers
3.5 (1) (a) In relation to a regulated activity of Class 3, section 4 does not
apply to an individual whilst acting as —
(i) a liquidator or provisional liquidator of a licenceholder, provided that person complies, where appropriate, with the condition specified in sub-paragraph (2); and (ii) any individual acting under the control or direction of a liquidator or provisional liquidator; or (b) a receiver or manager of a licenceholder.

5 SD 602/99 as amended by SD 81/03

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 9 (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.18 Functionaries of exempt or exempt-type schemes which are wholly-owned subsidiaries of licenceholders
3.6 (1) In relation to a regulated activity falling within paragraph (11) of Class 3
consisting of services provided to an exempt scheme or an exempt-type scheme (“the scheme”), section 4 does not apply to a person carrying on that activity where — (a) the company appointed to the exempt scheme is a directly and wholly-owned subsidiary of the licenceholder; (b) the parent licenceholder holds the requisite Class 3(11) and 3(12) licence permissions; (c) both the person defined at (a) and the licenceholder have common management and staff; (d) the Class 3(11) permission held by the licenceholder includes the relevant activity to be undertaken by the direct, wholly-owned subsidiary; and19 (e) the licenceholder submits details of the person(s) defined at (a) together with scheme statistics to the Authority on a calendar quarter basis,20 and, the exempt persons must comply with the conditions in sub-paragraph (2). (2) The conditions referred to in paragraph (1) are that, in accordance with an agreement between the exempt person and a person licensed to carry on activities falling within paragraph (12)of Class 3 (“the licenceholder”) — (a) the exempt person is responsible for providing sufficient information to the licenceholder about the exempt person and the scheme to enable the licenceholder to satisfy itself that the scheme continues to comply with the requirements of paragraph l(l)(a) and (b) of Schedule 3 to the Collective Investment Schemes Act 2008; and (b) the licenceholder is responsible for satisfying itself, on the basis of information provided pursuant to (a) above and any other information in the possession of the licenceholder, that the scheme continues to comply with the requirements of paragraph l(l)(a) and (b) of Schedule 3 to the Collective Investment Schemes Act 2008. Appointments under section 13(1) of the Collective Investment Schemes Act 2008
3.7 In relation to a regulated activity of Class 3, section 4 does not apply to a person
appointed under section 13(1) of the Collective Investment Schemes Act 2008.

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Court appointed scheme functionaries
3.8 In relation to a regulated activity of Class 3, section 4 does not apply to a person
appointed under section 15(1) of the Collective Investment Schemes Act 2008. Exempt managers, asset managers or investment advisers to specialist funds
3.9 (1) In relation to an activity falling within paragraphs (1), (6) or (7) of Class 3,
section 4 does not apply to the manager, asset manager or investment adviser (“the SF
exempt person”) of or to a scheme which is a specialist fund within the meaning of the Collective Investment Schemes (Specialist Fund) Regulations 2010 where the conditions specified in sub-paragraph 2 are met. (2) The conditions referred to in sub-paragraph (1) are that — (a) the specialist fund to which the SF exempt person provides services must have an administrator who holds the requisite Class 3(2) licence permission in relation to that Fund (“Isle of Man Administrator”); (b) the Isle of Man Administrator must — (i) provide administration services under a Class 3(9) permission to the SF exempt person, which must include the maintenance of the SF exempt person’s records, including in relation to their compliance with AML/CFT legislation; (ii) notify the Authority at least 20 business days prior to the commencement of services to each SF exempt person under (i) and confirm, as part of that notification, that it has considered and determined adequate and appropriate the SF exempt person’s systems and controls; and (iii) notify the Authority of any matter relating to the SF exempt person which may have a material impact on the specialist fund to which the SF exempt person provides services; (c) arrangements for the provision of administration services must be in place between the specialist fund, the Isle of Man Administrator, and SF exempt person, and services must be provided in accordance with those arrangements; (d) a director, who is an individual, of the Isle of Man Administrator must also be a director of the SF exempt person; and (e) no activity of the SF exempt person, other than the activities in paragraph (1), may be carried on by the SF exempt person in relation to the specialist fund to which the SF exempt person provides services, unless the prior written approval of the Isle of Man Administrator has been obtained.21 CLASS 4 - CORPORATE SERVICES

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 11 Interpretation For the purpose of this Class “company” includes — (a) a Stiftung (foundation) established under the law of Austria, Germany or Liechtenstein; (b) an Anstalt (institution) established under the law of Liechtenstein; (c) a foundation or similar entity established under the law of a country or territory outside the Island; (d) a foundation established under the law of the Island. Regulated entities
4.1 Section 4 does not apply to a person —
(a) providing regulated activities falling within paragraph (2) of Class 4 to a Class 4 licenceholder; or (b) providing regulated activities falling within paragraphs (6) or (7) of Class 4 to — (i) a regulated entity; or (ii) a collective investment scheme established under Schedule 1, or paragraph 2 of Schedule 2 to the Collective Investment Schemes Act 2008.22 Directorships - de minimis activities
4.2 (1) In relation to an activity falling within paragraph (6) of Class 4, section 4
does not apply to an individual who holds 10 or fewer appointments as a director.23 (2) Any exemption for a group under paragraph 4.3 will be counted as one appointment for the purpose of paragraph 4.2(1). (3) Any appointment exempted under paragraph 4.7 must be included in the calculation of appointments for the purpose of paragraph 4.2(1).24 Directorships – transitional arrangements25 4.2A (1) Subject to (2), and as a result of paragraphs 4.2(3) and 4.3(2), in relation to a regulated activity falling within paragraph (6) of Class 4, section 4 does not apply where — (a) any individual was, immediately before the coming into operation of the Financial Services (Exemptions) (Amendment) Regulations 2016, carrying on that regulated activity; (b) the carrying on of that activity did not require a licence; and (c) that individual has applied for a licence to carry on that activity before 30 November 2016.

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(2) The exemption in (1) will apply only until — (a) the end of the period within which an appeal can be brought under
section 32 of the Act against the decision on the application; or
(b) where an appeal is brought, the determination or withdrawal of the appeal.26 Group officers
4.3 (1) Subject to (2), in relation to an activity falling within paragraph (6) of Class
4, section 4 does not apply to an individual who is an officer of a company which is part of a group, for any company which is a member of that group.27 (2) This exemption only applies to an individual who acts as a director of companies falling within one group.28 Corporate officers
4.4 In relation to an activity falling within paragraph (6) or (7) of Class 4, section 4
does not apply to a person which is a directly and wholly-owned subsidiary of a body corporate that is licensed to carry on regulated activities of Class 4 and whose business consists solely of acting as director or secretary (but not both) of the client companies of that licenceholder29 . Nominee services
4.5 In relation to an activity falling within paragraph (9) of Class 4, section 4 does not
apply to a person acting solely in the capacity of a nominee, whether as one or a combination of a nominee shareholder, or a nominee member of a company, or a nominee partner to a limited partnership, where — (a) that person is a directly and wholly-owned subsidiary of a body corporate that is licensed to carry on activities of Class 4 (“the licenceholder”); and30 (b) the first-mentioned activity is wholly incidental to, and being conducted exclusively in connection with, the Class 4 regulated activity undertaken by the licenceholder.31 32 Company officers and employees
4.6 (1) In relation to a regulated activity of Class 4, section 4 does not apply to an
individual who —
(a) is an employee, director or other officer of a company licensed to carry on activities of Class 4 (“the licenceholder”), and (b) carries on that activity in the course of his employment or as holder of that office, as the case may be.

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 13 (2) In relation to a regulated activity of Class 4, section 4 does not apply to an individual who — (a) is not an employee, director or other officer of a company licensed to carry on activities of Class 4 (“the licenceholder”), but (b) is an employee, director or other officer of another company in the same group as the licenceholder, and (c) carries on that activity on behalf of the licenceholder.33 (3) In relation to a regulated activity of Class 4, section 4 does not apply to an individual who — (a) is an employee, director or other officer of a company licensed to carry on that activity (“licenceholder A”), and (b) carries on that activity under the direction of, and in the course of a business carried on by, another person licensed to carry on that activity (“licenceholder B”) pursuant to arrangements made between licenceholder A and licenceholder B. (4) In relation to an activity falling within paragraph (6) of Class 4, section 4 does not apply to an individual who is appointed as director of a company pursuant to arrangements between the company and a person licensed to carry on activities of Class 4 (“the licenceholder”) which comply with the conditions specified in sub-paragraph (5). (5) The conditions referred to in sub-paragraph (4) are that the arrangements — (a) require that the licenceholder be and remain satisfied that the individual is suitable and competent for the office he holds; (b) require that the licenceholder be and remain satisfied that the individual understands the duties and responsibilities pertaining to the office he holds under the relevant laws; (c) require that the licenceholder be satisfied, and continue to satisfy the Authority, that the individual is a fit and proper person to carry on the activity;34 (d) provide that the arrangements shall be terminated if the requirements of conditions (a) to (c) cease to be fulfilled; and (e) have not been terminated pursuant to condition (d) or otherwise. Domestic services
4.7 (1) Subject to paragraph 4.2, in relation to an activity falling within
paragraphs (1) to (4) and (6) to (15) of Class 4, section 4 does not apply to a person who is resident in the Island and where the company or partnership which is the subject of the activity — (a) is resident in the Island; (b) has a permanent establishment in the Island; and

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(c) carries on as its sole or principal trade or business — (i) the holding of assets which are beneficially owned by persons who are resident in the Island; or (ii) the supply made within the Island of any goods or services; or (iii) the manufacture in the Island of any goods; or (iv) the holding of real property where the majority of that property is in the Isle of Man.35 36 (2) For the purpose of this paragraph — “beneficially owned” includes ultimate ownership through a trust or company or a series of trusts or companies; “company” does not include an open-ended investment company or other type of collective investment scheme; 37 “permanent establishment” means a fixed place of business through which the business of the company is wholly or partly carried on; “real property” includes land and buildings including blocks of flats, apartments, houses or industrial units as well as shared areas such as car parks, gardens and access areas;38 “resident” means a resident in the Island for the purposes of income tax. Liquidators, receivers etc.
4.8 (1) In relation to a regulated activity of Class 4, section 4 does not apply to a
person whilst acting in his capacity as —
(a)
(i) a liquidator or provisional liquidator of a licenceholder, provided that the person complies, where appropriate, with the condition specified in sub-paragraph (2); or (ii) a liquidator or provisional liquidator of a company or limited partnership; and any individual acting under the control or direction of a liquidator or provisional liquidator; (b) a receiver or manager appointed in respect of any of the assets of a company or limited partnership; or (c) receiver of a patient. (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.39

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 15 Administration for licenceholder
4.9 In relation to a regulated activity of Class 4, section 4 does not apply to a person
who carries on the activity solely on behalf of a person licensed to carry on that activity. Activities of the Isle of Man Post Office
4.10 In relation to a service or activity falling within paragraphs (4) or (13) of Class 4,
section 4 does not apply to the Isle of Man Post Office.
Secretaryships – de minimis activities40
4.11 In relation to an activity falling within paragraph (7) of Class 4, section 4 does not
apply to an individual who holds 10 or fewer appointments as a secretary.41 Entrepreneur directorships42
4.12 In relation to a regulated activity falling within paragraph (6) of Class 4, section 4
does not apply to an individual providing those services to a company where the individual has an investment of 10% or more in the issued share capital of that company.43 Charities44
4.13 In relation to a regulated activity falling within paragraph (6) or (7) of Class 4,
section 4 does not apply to an individual providing those services to a company
registered under the Charities Registration Act 1989 or any wholly-owned subsidiaries of that company if the individual receives no remuneration for providing the service to either the charity or a wholly-owned subsidiary of the charity. For the avoidance of doubt, remuneration does not include reimbursement of reasonable expenses.45 CLASS 5 -TRUST SERVICES Corporate trustees, protectors and enforcers
5.1 In relation to an activity falling within paragraph (1), (2), (5) or (6) of Class 5,
section 4 does not apply to a company (“company A”) acting as trustee or protector in
relation to an express trust, or as enforcer in relation to a purpose trust or a foundation, for which another company (“company B”) provides trust administration services where — (a) company B is — (i) the immediate and sole parent of company A, and (ii) licensed to carry on activities falling within paragraph (1), (2), (5) or (6) of Class 5; and (b) the activities of company A are restricted to activities falling within paragraphs (1), (2), (5) and (6) of Class 5 which company B is permitted to carry on by virtue of its licence.

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Company officers and employees
5.2 (1) In relation to a regulated activity of Class 5, section 4 does not apply to an
individual who —
(a) is an employee, director or other officer of a company licensed to carry on activities of Class 5 (“the licenceholder”); and (b) carries on that activity in the course of his employment or as holder of that office, as the case may be. (2) In relation to a regulated activity of Class 5, section 4 does not apply to an individual who — (a) is not an employee, director or other officer of a company licensed to carry on activities of Class 5 (“the licenceholder”), but (b) is an employee, director or other officer of another company in the same group as the licenceholder, and (c) carries on that activity under the direction of and in the course of business of the licenceholder. (3) In relation to a regulated activity of Class 5, section 4 does not apply to an individual who — (a) is an employee, director or other officer of a company licensed to carry on that activity (“licenceholder A”), and (b) carries on that activity under the direction of, and in the course of a business carried on by, another person licensed to carry on that activity (“licenceholder B”) pursuant to arrangements made between licenceholder A and licenceholder B. Employee pension schemes, share schemes etc.
5.3 (1) Subject to sub-paragraph (2), in relation to an activity falling within
paragraph (1) or (2) of Class 5 in respect of an employee pension scheme or an employee share or debenture scheme, section 4 does not apply to an individual who — (a) is an employee, former employee, director, former director or other officer or former officer of a company licensed under the Act to carry on activities of Class 5); and (b) carries on that activity in the course of or as a result of his employment or former employment or as holder of that office. (2) Paragraph (1) does not apply if — (a) the employment, or the appointment to the office, is or was solely for the purpose of enabling that individual to carry on that activity; or

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 17 (b) in the case of a former employee, director or other officer, the appointment as trustee was made after his employment ceased or after he ceased to hold that office. De minimis activities
5.4 (1) In relation to an activity falling within paragraphs (1), (2), (5) and (6) of
Class 5, section 4 does not apply to a specified person who is not, and does not hold more than 10 appointments as either a trustee or protector of a trust or as an enforcer of a trust or foundation. (2) For the purpose of this paragraph, in determining the number of trusts in respect of which a specified person is or acts as trustee, or protector, or trusts or foundations of which a specified person acts as enforcer, no account shall be taken of any trust in respect of which, by virtue of this Schedule (other than this paragraph), section 4 would not apply to that person in relation to any activity of Class 5. Liquidators, receivers etc.
5.5 (1) In relation to a regulated activity of Class 5, section 4 does not apply to an
individual whilst acting as —
(a)
(i) a liquidator or provisional liquidator of a licenceholder, provided that person complies, where appropriate, with the condition specified in sub-paragraph (2); or (ii) a liquidator or provisional liquidator of any other company or limited partnership; and any individual acting under the control or direction of a liquidator or provisional liquidator; (b) a receiver or manager appointed in respect of any of the assets of a company or limited partnership; (c) the trustee of a composition or scheme of arrangement if appointed or approved by the High Court; or (d) receiver of a patient. (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.46 Private trust companies
5.6 (1) In relation to a regulated activity of Class 5, section 4 does not apply to a
company —
(a) the sole purpose of which is to provide services in respect of a specific trust or trusts; and

SCHEDULE l Financial Services (Exemptions) Regulations 2011
Page 18 SD No. 2011/0885 c
(b) which does not otherwise undertake or, directly or indirectly, hold itself out to the public as undertaking, any regulated activity of Class 5; where — (i) the administration of the trust or trusts is carried out by a person licensed to do so, and (ii) that person has notified the Authority in writing of the name of the company.47 (2) Without prejudice to the generality of paragraph (l)(b), a company shall be treated for the purpose of paragraph (1) as holding itself out to the public as undertaking a regulated activity of Class 5 if it undertakes that activity in response to introductions from third parties (not being persons licensed to carry on a regulated activity of Class 5) who hold themselves out to the public (whether within or outside the Island) as — (a) carrying on any regulated activity of Class 5; or (b) arranging for any such activity to be undertaken by others. Personal representatives etc.
5.7 In relation to a regulated activity of Class 5, section 4 does not apply to an
individual whilst acting in his capacity as personal representative or as trustee (including as trustee for sale), if the activity is wholly incidental to, or for the sole purpose of facilitating, the winding up of the estate of a deceased person. Administration for licenceholder
5.8 In relation to a regulated activity falling within paragraph (2) of class 5, section 4
does not apply to a person who carries on the activity on behalf of, and under the direction of, a person licensed to carry on that activity. Testamentary trusts
5.9 (1) In relation to a regulated activity of Class 5, section 4 does not apply to a
specified person where —
(a) the activity is carried on in respect of a trust created by or arising under the will of a deceased person; (b) the trust is governed by the law of the Island; (c) the testator was resident or domiciled in the Island at his death; (d) the activity is ancillary to a professional activity undertaken by the specified person in his professional capacity. (2) In relation to a regulated activity of Class 5, section 4 does not apply to a specified person where —

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 19 (a) the activity is carried on in respect of a trust created in the lifetime of the settlor; (b) the funds of the trust consist only of funds settled or provided — (i) by the settlor when the trust was created; or (ii) subsequently under the will of the settlor or his spouse; and any income or gain arising from those funds; (c) the settlor was resident or domiciled in the Island when the trust is created; (d) where (b)(ii) applies, the settlor or spouse was resident or domiciled in the Island at the date of death; and (e) the activity is ancillary to a professional activity undertaken by the specified person in a professional capacity. Small domestic trusts
5.10 In relation to a regulated activity of Class 5, section 4 does not apply to a specified
person where —
(a) at the time the trust was created, the settlor was resident or domiciled in the Island; (b) no funds have been settled or provided to the trust other than those settled or provided by the settlor or his spouse when the trust was created; and (c) at the time the activity is undertaken, the gross assets of the trust do not exceed £5,000. Statutory corporations
5.11 In relation to regulated activity of Class 5, section 4 does not apply to —
(a) a Department,
(b) a Statutory Board, or
(c) a local authority or joint board.
CLASS 6 – CROWDFUNDING PLATFORMS48
CLASS 7 - MANAGEMENT OR ADMINISTRATION SERVICES49 Liquidators, receivers etc.
7.1 (1) In relation to a regulated activity of Class 7, section 4 does not apply to —
(a) an individual whilst acting in the capacity of liquidator or provisional liquidator of a licenceholder, provided that person complies, where appropriate, with the condition specified in sub￾paragraph (2); and

SCHEDULE l Financial Services (Exemptions) Regulations 2011
Page 20 SD No. 2011/0885 c
(b) any individual acting under the control or direction of a liquidator or provisional liquidator. (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.50 Court appointed managers
7.2 In relation to a regulated activity of Class 7, section 4 does not apply to a manager
appointed by the High Court to manage the affairs of a person, in so far as those affairs relate to the carrying on of a regulated activity. CLASS 8 - MONEY TRANSMISSION SERVICES De minimis activities
8.1 (1) In relation to a regulated activity of Class 8, section 4 does not apply to a
person where —
(a) that person notifies the Authority in writing that he carries on, or intends to carry on, that activity; and51 (b) the turnover of that activity, or where that activity is part of a business comprising other activities, the turnover from that part only, at the end of any month was equal to or less than £50,000 in the preceding 12 months. (2) In relation to a regulated activity of Class 8, section 4 does not apply to a person — (a) to whom section 4 previously did not apply by virtue of sub￾paragraph (1), and (b) who, before the relevant date, applied to the Authority for a licence under the Act to carry on that activity,52 until application is granted or refused. (3) In this paragraph — “the relevant date” means the date when the person in question knew, or ought reasonably to have known, that the turnover referred to in sub￾paragraph (l)(b) exceeded £50,000; “turnover” in relation to a service or activity falling within paragraph (2) of Class 8, means the cumulative total, during the 12 months in question, of all or any of the following — (a) foreign currency which the person, in the course of carrying on the business of a bureau de change, bought from, or sold to, customers of the bureau de change;

Financial Services (Exemptions) Regulations 2011 SCHEDULE l c SD No. 2011/0885 Page 21 (b) payment services provided and executed by the person in the course of carrying on the business of payment services either directly or as agent; (c) cheques cashed by the person in the course of providing cheque cashing services; measured in sterling in accordance with generally accepted accounting principles; “turnover” in relation to a service or activity falling within paragraph (4) of Class 8, means the cumulative total, during the 12 months in question, of all money converted to electronic money, measured in sterling in accordance with generally accepted accounting principles. (4) For the purposes of sub-paragraph (3)(a), a calculation of turnover in relation to a bureau de change shall include, in relation to any transaction, the amount of money bought from a customer, or the amount of money sold to a customer, but not both. Transactions with overseas persons
8.2 In relation to a service or activity falling within paragraph (2) of Class 8, section 4
does not apply to an overseas person where the service or activity is conducted by a permitted person as agent or representative for the overseas person, provided — (a) the overseas person is authorised to conduct that service or activity off the Island by an overseas regulator; (b) the overseas person does not establish a permanent place of business on the Island for the purpose of carrying on such service or activity; and (c) the overseas person has notified the Authority of its and its agent’s services or activities on the Island.53 Activities of certain persons
8.3 In relation to a regulated activity of Class 8, section 4 does not apply to a person
where the person is —
(a) licensed to carry on a regulated activity falling within Class l(1) or 1(2); or54 (b) the Isle of Man Post Office; or (c) the National Savings and Investments (an executive agency of the Chancellor of the Exchequer of the United Kingdom); or (d) the Isle of Man Treasury, the Bank of England, the European Central Bank or the national central banks of an EEA State; or55 (e) Departments, Statutory Boards and local authorities; or

SCHEDULE l Financial Services (Exemptions) Regulations 2011
Page 22 SD No. 2011/0885 c
(f) licensed to carry on a regulated activity falling within Class 9 and is carrying on activity falling within paragraph (2), but no other paragraphs, of Class 8.56 Activities of certain agents 8.3A In relation to a service or activity falling within paragraph (2) of Class 8, section 4 does not apply to a person where the person is the agent of a person licensed to carry on a regulated activity falling within Class 1(1) or 1(2) (“the principal”), where that service or activity is conducted for that principal.57 Liquidators, receivers etc.
8.4 (1) In relation to a regulated activity of Class 8, section 4 does not apply to —
(a) an individual whilst acting in the capacity of liquidator or provisional liquidator of a licenceholder, provided that person complies, where appropriate, with the condition specified in sub￾paragraph (2); and (b) any individual acting under the control or direction of a liquidator or provisional liquidator. (2) The condition referred to in sub-paragraph (l)(a)(i) is that the person acting as liquidator or provisional liquidator must, in the case of a voluntary liquidation, seek the prior approval of the Authority to act in that capacity for that licenceholder.58 Payment institutions - transitional arrangements
8.5 (1) Subject to (2), in relation to a regulated activity falling within
paragraph (2) of Class 8, section 4 does not apply where — (a) any person was immediately before 1 January 2011 carrying on that regulated activity; (b) the carrying on of that activity did not require a licence; and (c) that person has applied for a licence to carry on that activity before 31 March 2011. (2) The exemption in (1) will apply only until — (a) the end of the period within which an appeal can be brought under
section 32 of the Act against the decision on the application, or
(b) where an appeal is brought, the determination or withdrawal of the appeal.

Financial Services (Exemptions) Regulations 2011 SCHEDULE 2 c SD No. 2011/0885 Page 23
SCHEDULE 2
Regulation 5.
USE OF EQUIPMENT ON THE ISLAND
Exemption

1. Section 4 does not apply to any person who utilises equipment where that person
   is —
   (a) a permitted person; or
   (b) a person regulated by another regulator either in the Island or elsewhere (“the regulator”), so long as the conditions specified in paragraph 2 are satisfied. Conditions
2. The conditions referred to in paragraph 1 are as follows —
   (a) the Authority has been notified of the presence of the equipment on the Island;59 (b) the person must not establish a permanent place of business on the Island for the purpose of carrying on a regulated activity; (c) the only regulated activity carried on in the Island is to utilise the equipment to conduct a regulated activity; (d) the person must not hold themselves out as carrying on a regulated activity in or from the Island; and (e) in the case of paragraph l(b), the regulator has been made aware of the utilisation of the equipment on the Island. Interpretation
3. For the purposes of this Schedule, “equipment” means computer apparatus
   located in the Island which is used to transact any regulated activity either for temporary business continuity purposes or otherwise.

SCHEDULE 3 Financial Services (Exemptions) Regulations 2011
Page 24 SD No. 2011/0885 c
SCHEDULE 3
Regulation 3.
INTERPRETATION
Expression Definition the Authority60 means the Isle of Man Financial Services Authority; company includes any body corporate, whether constituted under the law of the Island or elsewhere; composition or scheme of arrangement includes a deed of arrangement within the meaning of section 78 of the Bankruptcy Code 1892; the Commission61 [Revoked] director62 has the same meaning as in the Act but also includes — (a) an alternate director; and (b) in relation to a limited partnership which has elected to have legal personality, an individual who is a general partner; electronic money has the same meaning as in the Order; Group has the same meaning as in the Act; joint board has the same meaning as in the Local Government Act 1985; licenceholder means the holder of a licence issued under section 7 of the Act; licensed means licensed under section 7 of the Act; nominee company63 means a company whose sole activity is to hold as nominee or bare trustee monies or investments beneficially owned by other persons; overseas person has the same meaning as in the Order; payment institution has the same meaning as in the Order; payment services has the same meaning as in the Order; person64 includes any body of persons, whether incorporated or unincorporated, as well as an individual; receiver of a patient means a receiver of a patient appointed, or treated as if appointed, under Part 7 of the Mental Health Act 1998, and includes a person acting by the authority. of a judge of the High Court or the Attorney General pursuant to the said Part 7; registered legal practitioner means a person who is entered in the register maintained under the Legal Practitioners Registration Act 1986 regulator means a person (whether or not a public authority) whose functions are or include the regulation in a country or territory outside the Island of activities which would be regulated activities if they were carried on in or from the Island; regulated entity65 regulated entity means a company which is — (a) licensed under the Act; (b) authorised under section 8 of the Insurance Act

Financial Services (Exemptions) Regulations 2011 SCHEDULE 3 c SD No. 2011/0885 Page 25 2008; (c) the holder of a permit issued under section 22 of the Insurance Act 2008; (d) registered under section 23 of the Insurance Act 2008; (e) registered under section 36(1) of the Retirement Benefits Schemes Act 2000; (f) a trustee of a retirement benefits scheme that is registered as authorised or recognised under the Retirement Benefits Schemes Act 2000; or (g) regulated by the Isle of Man Gambling Supervision Commission; the Rule Book66 means the rules, or any part of the rules, made by the Authority under section 18 of the Act; specified person means a person who — (a) is an advocate or firm of advocates; or (b) is a registered legal practitioner or a firm of registered legal practitioners; (c) is a member of one of the following bodies — (i) the Institute of Chartered Accountants in England and Wales; (ii) the Institute of Chartered Accountants of Scotland; (iii) the Institute of Chartered Accountants in Ireland; or (iv) the Association of Chartered Certified Accountants. trustee in bankruptcy means a trustee appointed under section 7(1) of the Bankruptcy Code 1892, and includes an official trustee nominated to act as trustee under that section.

Endnotes Financial Services (Exemptions) Regulations 2011
Page 26 SD No. 2011/0885 c
ENDNOTES
Table of Endnote References
1 The format of this legislation has been changed as provided for under section 75 of, and paragraph 2 of Schedule 1 to, the Legislation Act 2015. The changes have been approved by the Attorney General after consultation with the Clerk of Tynwald as required by section 76 of the Legislation Act 2015. 2 Regulation 4 substituted by SD2016/0100. 3 Subpara (2) amended by SD2016/0100. 4 Subpara (c) substituted by SD2017/0345. 5 Subpara (d) substituted by SD2017/0345. 6 Subpara (b) substituted by SD2017/0345. 7 Subpara (c) substituted by SD2017/0345. 8 Subpara (2) inserted by SD374/2013. 9 Subpara (3) revoked by SD2017/0345. 10 Subpara (4) inserted by SD374/2013 and renumbered as subpara (3) by SD2017/0345. 11 Cross-heading inserted by SD2016/0100. 12 Para 2.10 inserted by SD2016/0100. 13 Para (c) amended by SD374/2013 and by SD2016/0100. 14 Para (b) substituted by SD2017/0345. 15 Para (a) amended by SD2017/0345. 16 Subpara (3) inserted by SD2017/0345. 17 Subpara (4) re-numbered and amended by SD2017/0345. 18 Subpara (2) amended by SD2016/0100. 19 Para (d) amended by SD2016/0100. 20 Para (e) amended by SD2016/0100. 21 Para 3.9 inserted by SD2017/0262. 22 Para 4.1 substituted by SD2016/0100. 23 Subpara (1) substituted by SD2016/0100. 24 Subpara (3) inserted by SD2016/0100. 25 Cross-heading inserted by SD2016/0100. 26 Para 4.2A inserted by SD2016/0100. 27 Subpara (1) amended by SD2016/0100. 28 Subpara (2) substituted by SD2016/0100. 29 Para 4.4 substituted by SD374/2013. 30 Para (a) substituted by SD2016/0100. 31 Para (b) substituted by SD2016/0100. 32 Para 4.5 amended by SD374/2013. 33 Para (c) substituted by SD2016/0100. 34 Para (c) amended by SD2016/0100. 35 Subpara (iv) substituted by SD2017/0345.

Financial Services (Exemptions) Regulations 2011 Endnotes c SD No. 2011/0885 Page 27

36 Subpara (1) amended by SD2016/0100.
37 Definition of “company” amended by SD2017/0345.
38 Definition of “real property” inserted by SD2017/0345.
39 Subpara (2) amended by SD2016/0100.
40 Cross-heading inserted by SD2016/0100.
41 Para 4.11 inserted by SD2016/0100.
42 Cross-heading inserted by SD2016/0100.
43 Para 4.12 inserted by SD2016/0100.
44 Cross-heading inserted by SD2016/0100.
45 Para 4.13 substituted by SD2016/0186.
46 Subpara (2) amended by SD2016/0100.
47 Subpara (ii) amended by SD2016/0100.
48 Class 6 Heading substituted by SD2016/0100.
49 Class 7 Heading substituted by SD2017/0345.
50 Subpara (2) amended by SD2016/0100.
51 Para (a) amended by SD2016/0100.
52 Para (b) amended by SD2016/0100.
53 Para (c) amended by SD2016/0100.
54 Para (a) amended by SD2016/0186.
55 Para (d) substituted by SD2019/0027 with effect from 31/12/2020 at 23:00. 56 Para (f) inserted by SD2019/0047. 57 Para 8.3A amended by SD2016/0186. 58 Subpara (2) amended by SD2016/0100. 59 Para (a) amended by SD2016/0100. 60 Definition of “the Authority” inserted by SD2016/0100. 61 Definition of “the Commission” revoked by SD2016/0100. 62 Definition of “director” substituted by SD2016/0100. 63 Definition of “nominee company” amended by SD2016/0100. 64 Definition of “person” inserted by SD2016/0100. 65 Definition of “regulated entity” substituted by SD2016/0100 and amended by SD2017/0345. 66 Definition of “the Rule Book” amended by SD2016/0100.