Applying for a permission

In-scope Alternative Investment Fund Manager (AIFM)

 

About

The purpose of this page is to explain the application process for an In-scope Alternative Investment Fund Managers (In-scope AIFM).

This section sets out:

  • What an In-scope AIFM is and what this regulated activity would allow you to do
  • Application Process
  • Capital Requirements 
  • Additional Information

What is an In-scope Alternative Investment Fund Manager and what would this regulated activity allow you to do?

The Alternative Investment Fund Managers Directive 2011/61/EU (AIFMD) requirements are set out in the Financial Services (Alternative Investment Fund Managers) Regulations 2020. AIFMD does not directly regulate the operations of Alternative Investment Funds (AIFs) but instead regulates the managers of the AIFs; i.e. the AIFMs. It is therefore prudent to determine who the AIFM is for the purposes of the AIFMD as some AIFs may fall within the scope and definition of AIFMs.

An AIFM regulated activity will allow the applicant to manage one or more AIFs.

The permission issued will specify the scope of services and instruments that the firm can carry on business in, from the list below.

  1. Investment management - portfolio management.
  2. Investment management - risk management.
  3. Administration: Legal and fund management accounting services.
  4. Administration: Customer inquiries.
  5. Administration: Valuation and pricing, including tax returns.
  6. Administration: Regulatory compliance monitoring.
  7. Administration: Maintenance of unit-/shareholder register.
  8. Administration: Distribution of income.
  9. Administration: Unit/shares issues and redemptions.
  10. Administration: Contract settlements, including certificate dispatch.
  11. Administration: Record keeping.
  12. Marketing.
  13. Activities related to the assets of AIFs.
  14. Management of Portfolios of Investments.
  15. Non-core: Provision of investment advice.
  16. Non-core: Safe-keeping and administration in relation to shares or units of collective investment undertakings.
  17. Non-core: Reception and transmission of orders in relation to financial instruments.

In-scope AIFMs carrying out investment services, authorised in Gibraltar, are also required to be members of the Investor Compensation Scheme. Further information is available on the Gibraltar Investor Compensation Scheme website at www.gics.gi 

 

Application process

Following successful completion of the pre-application process, applicants should submit an application in line with the Staged Application for Authorisation Approach.

Initially, the applicant will only submit the Stage 1 application information - it is important that only Stage 1 information is provided at the outset of the application process.

The GFSC will communicate to the applicant that the application can progress to the next stage once the GFSC is satisfied with the content provided at the current stage. The applicant will then be invited to submit the further information required at the next stage of the application process.

Please request cloud access from the GFSC to submit the information requested, via e-mail to [email protected], stating in the subject field: ‘Name of Applicant – Application’.  Paper copies are not required unless indicated by the team.

Please note that we accept signed signature copies sent via e-mail and electronic signatures, which must originate from the Regulated Firm /Applicant’s domain.  

Stage 1 - Business Model, Capital & Key Individuals

The following is to be submitted for Stage 1: 

On receipt of the application fee and Stage 1 documents, the GFSC will confirm the GFSC Supervisor who has been assigned to assess the application for authorisation.

Any missing or additional sector-specific documents and/or information required by the GFSC to complete Stage 1 will be communicated to the applicant during Stage 1.

When the GFSC is satisfied with all the responses and information/documentation received, the GFSC will inform the applicant that its application can progress to Stage 2.  

Stage 2 - Risk Management, IT Systems, Corporate Governance & Financial Crime

The following is to be submitted for Stage 2: 

  • Stage 2 of the General Comprehensive Business Plan (not including Stage 3);
  • Documentation and information including, but not limited to:
    • Corporate Governance and control
    • Business Continuity Management Plan
    • IT infrastructure, Cyber and systems including outsourcing arrangements
    • Operational & Outsourcing Risk including material outsourcing arrangements
    • Systems controls & Risk Management
    • Financial Crime controls, compliance with Anti-Money Laundering/Combating the Financing of Terrorism requirements (as applicable)
    • Risk Methodology and framework policy documents
    • Risk Register & controls
    • Disaster Recovery Plan 
    • Updated business plan, if required.

Any missing or additional sector-specific documents and/or information required by the GFSC to complete Stage 2 will be communicated to the applicant during Stage 2.

When the GFSC is satisfied with all the responses and information/documentation received from an applicant, the GFSC will inform the applicant that its application can progress to Stage 3.

Stage 3 - Conduct of Business, Non-Financial Resource, Policies & Procedures

The following is to be submitted for Stage 3: 

  • Stage 3 of the General Comprehensive Business Plan;
  • Documentation and information including, but not limited to:
    • Non-financial resources
    • Compliance structure
    • Conduct of Business (Full Conduct Risk Framework documents)
    • Detail of KPIs
    • Consumer Duty compliance (as applicable)
    • Operational Resilience compliance (as applicable)
    • Remuneration Policy 
    • Conflict of Interest Policy
    • Conflict of Interest Register
    • Liquidity/solvency policies 
    • Internal Audit Plan 
    • Complaints Handling Policy 
    • Terms of Reference of the Board, Board sub-committees, Risk Committee and/or Audit Committee, Underwriting/Pricing committees, as applicable 
    • Audit, accounting, and banking arrangements 
    • Professional Indemnity Insurance 
    • Contracts with parties to whom material operational functions are outsourced 
    • Completed and signed Regulated Individual Forms and Non-Executive Director Forms
    • Mobilisation Plan (if applicable).

When the GFSC is satisfied with the Stage 3 responses and information, the application will move to a GFSC decision for authorisation.

Additional Services

Regulated Firms that are already authorised by the GFSC may apply to extend their permission to provide additional financial or professional services. If you are seeking authorisation for additional services, please contact the Authorisation team in order for us to determine what documents are required for submission.

The below sets out an overview of the expected information requested:

  • Application Fee (if applicable);
  • Revised Business Plan;
  • Financial Projections for the next 3 years, clearly identifying the impact of the additional business:
  • Profit and Loss account
  • Balance Sheet
  • Stress Test on Financial Projections
  • Regulated Individual Form (for any new individual carrying out a Regulated Individual function);
  • Controller Form (for any new Controllers within the structure); and
  • Any other document the applicant considers the GFSC should take into consideration as part of the application.

The Regulated firm should consider the following:

  • What new services/permissions it requires;
  • The type of new business/activity;
  • Where the business will be sourced;
  • Resources to deal with the additional business;
  • The impact of the additional business on its capital requirements; and
  • What changes are being effected to its systems and controls.

Capital Requirements

An AIFM’s minimum initial and ongoing capital requirements are the higher of:

  • €125,000 (or where a self-managed AIFM, €300,000); or
  • The own funds calculation as per AIFMD.