Gibraltar funds do not require a Gibraltar-based investment manager or advisor.

However an investment manager managing an EIF must comply with the legislation from its home jurisdiction.

If a manager is based in Gibraltar, it will ordinarily require a license in order to conduct investment management or fund management business. At the time of writing, Gibraltar is still applying the European MIFID 2 and AIFMD and will continue to do so for the near future.  However, Gibraltar also has a small AIFM regulatory regime for those managers managing AIFs that fall below the in-scope requirements of AIFMD. Legislation is currently been drafted to allow larger funds to also opt out of on the basis that Gibraltar no longer forms part of the European Union.

A Gibraltar firm carrying out core investment services will require authorisation under MiFID 2. Investment services include receipt or execution of orders relating to financial instruments, portfolio management and the provision of investment advice. There are three basic categories of license:

In addition to the basic capital requirement under the license process, each investment manager is required to complete an Internal Capital Adequacy Assessment Process (‘ICAAP’). Submission to the FSC determines what additional capital is required to support the business, taking into account the risks faced by the business and mitigation controls in place. Typically most businesses will need to provide some additional capital above the minimum set out in the regulations.

A Gibraltar investment manager or advisor must have a physical presence and staff located in Gibraltar. Investment managers authorised in Gibraltar can freely provide services the UK on the basis of the market access as between Gibraltar and the UK which is unaffected by Brexit. Services can be provided on a cross-border basis or via the establishment of a branch in the UK. . Similarly UK managers can provide services in Gibraltar.

A new investment manager in Gibraltar, will be required to complete the application process set out in the FSC website. The FSC employs a universal application process across all licensed activities. The main elements of the application comprise:

• Completion of application forms for the business and all its controllers;

• Provision of a detailed business plan and relevant policies and manuals;

• Provision of a 3 year financial plan with accompanying statutory returns;

• Submission of an ICAAP assessment;

• Details of the systems and controls in place;

• Details of compliance and anti-money laundering procedures; and

• Business continuity plan.

The application time frame is driven by the quality of the application submitted. If the application includes the appropriate level of foresight and due diligence then an investment manager can expect to be licensed in Gibraltar within a period of three to six months. Once an application is submitted, the FSC will work to ensure that the principal individuals behind the business are:

• fit and proper to run and authorised business;

• have the resources, systems and controls to effectively manage the business;

• adhere to the ‘four eyes’ principle; and

• that mind and management of the investment manager is located in Gibraltar.