The Isle of Man financial regulator has revised its policy in relation to who, locally, may act as a custodian to an Experienced Investor Fu...

The Isle of Man financial regulator has revised its policy in relation to who, locally, may act as a custodian to an Experienced Investor Fund or Professional Investor Fund after consulting with the island’s Fund Management Association. In addition to licensed banking institutions in the Isle of Man, the Commission will now consider investment businesses with a Category 4 or 5 licence who will be assessed on a case by case basis taking into account the type or nature of the underlying scheme asset. They will also be required to demonstrate to the Commission that it is an entity with adequate financial resources and has the relevant track record, competence, experience and systems to undertake this function. The Commission’s existing policy, under which only a licensed banking institution can act as a Custodian in the Isle of Man, is being retained for those persons wishing to act as trustee/custodian of an authorised or “pure” international scheme. Jon Carr, chairman of the Isle of Man Fund Management Association said, “The FMA welcome this move. The EIF structure is now the fund of choice for establishing funds in the Isle of Man. Since this product was launched in October 1999, 141 EIFs are now operated in the Island with funds under administration currently standing at £4.1 billion ($7.47 billion), which represents 53 per cent of the total net asset value of all collective investment schemes administered in the Island." The Experienced Investor Fund structure was launched in October 1999 and was designed to provide a simple, inexpensive and flexible solution to sophisticated individual investors, market professionals and global asset managers, while providing an adequate level of comfort to investors by ensuring proper disclosure and administration.