Skip to main content

Key market developments in the Isle of Man

Back Arrow Back

Key market developments in the Isle of Man

Imminent market developments in the Isle of Man are expected to affect corporates, private clients and those operating in the capital markets over the coming months. Our Isle of Man team highlight the key changes and outline the steps required for compliance.

New Isle of Man beneficial ownership requirements 

The Isle of Man Government recently passed the Beneficial Ownership (Amendment) Act 2021 which comes into force on 1 September 2021.

The changes have been made in response to the Island’s Mutual Evaluation Report 2016, conducted by MONEYVAL, and will further improve the accuracy of the database which records beneficial ownership – defined as the natural person or people who ultimately own or control more than 25 per cent of a company, limited partnership with legal personality, or foundation*.

Impact
The amendment will reduce the time allowed to make updates, without penalty, to the Isle of Man's database of beneficial ownership by a nominated officer or corporate service provider to a 21-day limit.

Owners of impacted legal entities in the Isle of Man should note the change of deadline timings. This will ensure any changes to the registerable beneficial ownership after the 1 September 2021 are advised to us promptly.

Changes to the Isle of Man Companies Act 2006 requirements

The Isle of Man Government passed the Companies (Amendment) Act 2021 in June this year. However, the Isle of Man Treasury are still to pass the required Order which will appoint the day the Act will come into force, which is expected imminently.

Impact
One of the principal changes of the Act is that Isle of Man companies incorporated under the Companies Act 2006 will be required to register changes in directors with the Companies Registry within one month. This was a MONEYVAL recommendation and will align the companies incorporated under the Companies Act 2006 to the Companies Act 1931 in this respect.

Once the necessary Order has been issued we will update those clients affected so that any required future filings can be made within the new one-month deadline.

The imminent end of LIBOR

Benchmark Interbank Offered Rates (IBORs) - benchmark interest rates that indicate borrowing costs between banks - such as the London Interbank Offered Rate (LIBOR) are set to formally cease after December 31, 2021. IBORs will be replaced by new "risk-free" Alternative Reference Rates (ARRs), details of which are provided for information purposes below: 

Currency   New Rate Acronym Collateralisation Description
GBP Sterling Overnight Index Average SONIA Unsecured Unsecured rate that covers overnight wholesale deposit transactions
 
USD Secured Overnight Finance Rate  SOFR Secured Secured rate that covers multiple overnight repo market segments
CHF Swiss Average Rate Overnight SARON Secured Secured rate that reflects interest paid on interbank overnight repo
EUR Euro Short-Term Rate €STR  Unsecured Unsecured rate that captures overnight call market rate
YEN Tokyo Overnight Average Rate TONAR Unsecured Unsecured rate that captures overnight wholesale deposit transactions

Impact
With the absence of legislation to interpret the use of LIBOR in contracts after December 31 2021, we would encourage those with lending arrangements to review their positions, together with any documentation relied upon for group or associate lending. Should any reliance on LIBOR be identified, suitable amendments to the affected contracts should be made to ensure the continued effectiveness of contracts after LIBOR's retirement date.

At Ocorian we have produced precedent resolutions and loan agreement addendums to assist in the mitigation of the impact of the changes to LIBOR and other IBORs. If we can be of any assistance in respect of this exercise and you would like to know more about these services, then please do contact our team below or your usual Ocorian contact for further information.

We're here to help

Our expertise across the corporate, fiduciary and fund services sectors means we are well positioned to support your operations in preparing for these market developments. We can work closely with you and your advisers to offer you confidence, security and opportunity with your endeavours. Get in touch with our team below today.

* MONEYVAL is the Council of Europe’s permanent monitoring body for assessing compliance with the principle international standards to counter money laundering and the financing of terrorism

You may also like

09 July 2021

Reading time: 4 minutes

Vote Ocorian in five categories at Citywealth's IFC Awards 2022

We are delighted to have been shortlisted in five categories in the Citywealth International Finan...

Read more

16 August 2021

Reading time: 4 minutes

Ocorian enhances presence in Guernsey with acquisition of Trust Corporation International

We are delighted to announce the acquisition of Trust Corporation International, subject to regula...

Read more

15 January 2020

Reading time: 7 minutes

Reaching New Heights - The Isle of Man Aircraft Registry

Brian Johnson, Consultant Technical Director of Aviation at Ocorian, examines how the aviation reg...

Read more