Key Features of Regulated, Qualifying, and Specialist Funds

Jan 2017 Page 1 of 7
GUIDANCE NOTE - Key Features of the Regulated Fund, Qualifying Fund and Specialist Fund as established under the Collective Investment Schemes Regulations 2010 January 2017 General Matters Regulated Fund Qualifying Fund Specialist Fund Status of the Fund Regulated Registered Registered Domicile Isle of Man Isle of Man Isle of Man Establishing the scheme Pre notification of the fund to the IOMFSA, with draft documentation, agreements and information Notification 10 working days after launch Notification 10 working days after launch Changes to the scheme Pre notification of material changes to the fund to the IOMFSA, with draft documentation, agreements and information Notification 10 working days after change. Notification 10 working days after change. Minimum Investment Level Set by governing body Each fund to agree between manager and governing body US$ 100,000 Entrant Criteria Set by governing body Qualifying Investor entrant criteria Specialist Investor entrant criteria Regulatory fees (as at 31 March 2016) Application Fee GBP 1250 Annual Fee GBP 1600 No Application Fee Annual Fee GBP 750 No Application Fee Annual Fee GBP 750

Isle of Man Financial Services Authority Jan 2017 Page 2 of 7 The Governing Body Regulated Fund Qualifying Fund Specialist Fund Governing body vetted by the IOMFSA (Directors/Trustee/ General Partner) Yes No No Governing body signs statement of responsibility Yes At least one IOM resident individual member of the Governing body Yes (if “overseas” administrator appointed this person must be an IOM Fiduciary licenceholder (or provided through one) and has extra notification obligations) Functionaries Regulated Fund Qualifying Fund Specialist Fund Manager or Administrator Manager Isle of Man licenceholder with IOMFSA permission to act for the fund Manager Isle of Man licenceholder Administrator IOM licenceholder or licensed in an acceptable jurisdiction Investment Advice/Asset Management Governing body must ensure appropriate arrangements are in place. If a regulated asset manager is not appointed the specific responsibilities under Collective Investment Schemes (Regulated Fund) Regulations 2010, regulations 20 to 25 must be fulfilled by the manager. Governing body must ensure appropriate arrangements are in place (manager consent required to investment advisers and asset managers). Governing body must ensure appropriate arrangements are in place. Fiduciary Custodian/Trustee Required? Yes (regulated in IOM, UK, Ireland, Luxembourg, Jersey or Guernsey or otherwise acceptable to the IOMFSA) No No

Isle of Man Financial Services Authority Jan 2017 Page 3 of 7 Custodian If sub-custodian is appointed they must be regulated in the Isle of Man or in a suitable jurisdiction Regulated in the Isle of Man or in a suitable jurisdiction Not required – custody arrangements disclosed in offering document Promoter The fund must appoint a promoter who may be a manager or a person who the governing body has assessed as being suitable to act as the funds promoter. A regulated promoter must be appointed if sales to “certain persons”(1) are allowed through non regulated financial advisers No specific requirements Regulated Financial Adviser No specific requirements If sales to “certain persons”(1) are restricted to sales through regulated financial advisers there is no need for a regulated promoter No specific requirements Qualifying Auditor Yes Responsibilities Regulated Fund Qualifying Fund Specialist Fund Ensure the regulations are complied with and offering documents and constitutional documents are compliant Governing body. Governing body. Governing body. Ensure only up to date offering documents are issued to investors and potential investors Governing body. Governing body. Governing body. Ensure the manager/ administrator (as applicable) is informed of all changes to the fund Governing body. Governing body. Governing body. Ensure Investors are notified of material changes Governing body. Governing body. Governing body. Determine whether the fund is and continues to be managed and Governing body, manager and fiduciary custodian/trustee. Governing body and manager. Governing body.

Isle of Man Financial Services Authority Jan 2017 Page 4 of 7 operated in accordance with its constitutional document Notify IOMFSA if determines that the fund is not managed and operated in accordance with its constitutional documents Manager and fiduciary custodian/trustee. Manager Administrator Notify IOMFSA if regulations are not being complied with Manager and fiduciary custodian/trustee. Manager Administrator Notify IOMFSA if a member of the governing body or the qualifying auditor is removed from such office, resigns or is nor reappointed Manager (the member and qualifying auditor must also notify with reasons) Manager (the member and qualifying auditor must also notify with reasons) Administrator (the member and qualifying auditor must also notify with reasons) Satisfy itself about investor’s status on basis of declarations Manager Manager Administrator Submit notifications to IOMFSA on Launch Governing body and manager. Governing body and manager. Governing body and administrator. Notification to IOMFSA on alteration of the fund Manager Manager Administrator Complete and submit the annual compliance declaration to IOMFSA Governing body and manager. Governing body and manager. Governing body Provide quarterly statistical information Manager Manager Administrator Report to IOMFSA if requirements re offering document declarations or fund accounting not complied with Manager Manager Administrator Notify IOMFSA where audit report is qualified and/or a management letter is issued by the auditors Manager Manager Administrator

Isle of Man Financial Services Authority Jan 2017 Page 5 of 7 Notify IOMFSA if audited annual financial statements are late (with reasons, timetable for distribution) Manager Manager Administrator Ensure adequate procedures and controls are in place Manager No explicit requirement No explicit requirement Notify the fiduciary custodian or trustee of material lapses in procedures and controls Manager N/A N/A Responsible for fund promotion and the suitability and accuracy of promotional materials and advertising Promoter Regulated promoter (or manager if no regulated promoter) No explicit requirement Oversee the promotion of the fund Manager No explicit requirement No explicit requirement Investment, Borrowing, Valuation and Pricing Regulated Fund Qualifying Fund Specialist Fund Disclosure of investment objectives required in the offering document Yes Policy required for spread of investment risk Yes Not specified Not specified Risk Management Policy required Yes Not specified Not specified Regulations relating to hedging, gearing, borrowing, total debt commitment and liquidity (with additional flexibility where disclosed in the offering document) Yes No requirement No requirement

Isle of Man Financial Services Authority Jan 2017 Page 6 of 7 Regulations for valuation and pricing Yes No No Documents Required Regulated Fund Qualifying Fund Specialist Fund Constitutional document required to include prescribed information set out in the regulations Yes No No Offer document required to include all material information relevant to an informed judgement about participating in the fund Yes Offer document required to include prescribed information and risk warnings set out in the regulations Yes (dependent on the nature of targeted investors) Yes Yes Application Form required to include prescribed investor declarations set out in the regulations Yes Promotional and marketing materials required to be accurate and not misleading Yes Specific requirements for inclusion in advertisements set out in the regulations Yes No No

Isle of Man Financial Services Authority Jan 2017 Page 7 of 7 Financial Information Regulated Fund Qualifying Fund Specialist Fund Annual audited financial statements To be audited and distributed within 6 months of the financial year end To be audited and distributed within 6 months of the financial year end To be audited and distributed within 6 months of the financial year end Unaudited interim financial statements Required where the fund does not calculate a net asset value at least monthly. No requirement No requirement Distribution of Financial Statements The fund’s audited annual financial statements must be provided to the IOMFSA and distributed to investors no later than 6 months after the fund’s financial year-end or within the timescales set out in the offering document if earlier. The fund’s interim financial statements must be provided to the IOMFSA and made available to investors on request within 4 months of the date to which they are prepared or within the timescales set out in the offering document if earlier. The fund’s audited annual financial statements must be provided to the IOMFSA and distributed to investors no later than 6 months after the fund’s financial year-end or within the timescales set out in the offering document if earlier. The fund’s audited annual financial statements must be distributed to investors no later than 6 months after the fund’s financial year-end or within the timescales set out in the offering document if earlier. (1) “Certain Persons” – a person whose expertise, experience and knowledge to adequately appraise the investment is required to be certified by a financial adviser who has advised that person regarding investment. Status of Guidance: The Isle of Man Financial Services Authority issues guidance for various purposes, including to illustrate best practice, to assist licenceholders to comply with legislation and to provide examples or illustrations. Guidance is, by its nature, not law, however it is persuasive. Where a person follows guidance this would tend to indicate compliance with the legislative provisions, and vice versa.