Following comments in the International Monetary Fund’s 2009 Financial Sector Assessment Programme Report on the Isle of Man, the Isle of Man Financial Services Authority (the “FSA”) was proposed to take responsibility for the oversight of the anti-money laundering and countering the financing of terrorism (“AML/CFT”) compliance of certain businesses and professions (“Designated Businesses”). As a result, the Designated Businesses (Registration and Oversight) Act 2015 (“the “Act”) has recently been passed by Tynwald.
The principal businesses affected by the Act, who will need to register with the FSA, are professionals such as advocates, registered legal practitioners, tax advisers, auditors, other accountants, estate agents and moneylenders. The list also includes those dealing in financial guarantees such as voucher issuers, as well as businesses involved in the cryptocurrency sector and those dealing with substantial cash transactions. The scope of the Act is subject to interpretation and some businesses will require legal advice to determine whether or not their registration is necessary or desirable.
The Act does not make Designated Businesses FSA licenceholders subject to full FSA regulation. However, FSA licenceholders are exempt from the provisions of the Act, as they are already regulated by the FSA for AML/CFT purposes.
There is a grace period following the Act having come into force on 26 October 2015, meaning that existing businesses have until 26 April 2016 to submit their registration applications. “New businesses intending to undertake activity falling within the scope of the Act should take care,” said Christopher Kinley of Kinley Legal, which advises on the new legislation, “the six-month grace period only applies to businesses who were trading before the Act came into force on 26 October 2015, so new businesses in this area will need to complete registration with the FSA before they can commence trading”. Applications are expected to take two to four weeks to be determined by the FSA, following submission.