Approved Manager FAQs · 6/7

When ceasing operations or withdrawing an Approved Manager approval, first distinguish termination of regulatory approval from liquidation of the company. It is advisable to arrange client handover, outstanding obligations, assets and records, and confirm final filings and cessation requirements with the FSC. Liquidation reports, licence surrender and similar steps should not be treated as mandatory in every case.

Risk warning:Failure to distinguish termination of approval from company dissolution may result in ongoing regulatory obligations being overlooked.

The record-retention period must be determined by record category and the latest applicable AML/CFT documents; the five-year requirement for other licences must not be applied directly to an Approved Manager. In practice, classify and retain customer due diligence, transaction, management decision and regulatory filing records, and specify the starting point, access permissions and destruction approval process.

Risk warning:Destroying records too early may leave insufficient support for regulatory inspection or transaction tracing.

An effective complaints procedure may be set out in a written policy specifying intake channels, responsible personnel, investigation, handling of conflicts of interest, and written responses, with evidence of handling retained. Internal response deadlines and board reporting may be adopted as practical arrangements. Whether a complaint must be reported to the FSC depends on its nature, approval conditions, and the latest documents.

Risk warning:Having a person involved in the matter handle a complaint may create a conflict of interest and lead to an unfair outcome.

When a suspicious transaction is identified, escalate it to the MLRO under internal AML/CFT procedures, for the MLRO to assess whether reporting is required through the applicable statutory channel. Reporting only to the compliance officer does not constitute completion of the obligation. Keep records of the unusual facts, analysis and escalation, and handle the matter in accordance with applicable confidentiality rules, avoiding disclosure of the report to the relevant customer.

Risk warning:Disclosing suspicious report information to a client may impede an investigation and create compliance risks.

An Approved Manager must submit a regulatory annual return to the FSC by 31 January each year, with content and signing method determined by the then-current form. Financial statements are generally submitted separately within six months after the financial year-end. These are not the same as a company’s annual financial filing with its registered agent; any exemption from the latter must be checked separately.

Risk warning:Confusing different filing requirements may result in one being omitted after the other has been submitted.

Whether unaudited financial statements may be submitted must be confirmed under the applicable Approved Manager rules and the circumstances of the case; approval cannot be presumed solely because the business is “low risk.” Financial statements generally remain due within six months after the financial year-end. If unaudited statements are proposed, first verify the audit obligation, any exemption, and the conditions for approval.

Risk warning:Mistakenly believing that low risk means no audit is required may result in submitting non-compliant reports.

CRS/FATCA obligations cannot be determined solely from an Approved Manager’s regulated status, nor should filing through a channel designated by the FSC be assumed. Classification, due diligence, registration and reporting obligations should be determined according to the entity’s actual activities and the latest applicable tax documents. In practice, business, account and client information can first be compiled for a tax adviser to assess item by item.

Risk warning:Incorrect entity classification may result in under-reporting or improper collection of customers’ tax information.

Monitor scale using separate measures: aggregate AUM for relevant open-ended funds must not exceed 4 US dollars, and aggregate committed capital for closed-ended funds must not exceed 10 US dollars. Verify fund eligibility and what is included in the calculation. Internal alerts are recommended; if an exceedance is expected, communicate with the FSC in advance and assess the full SIBA licence pathway rather than exceeding the limit first and applying afterward.

Risk warning:Calculating on a per-fund basis rather than in aggregate may lead to an incorrect conclusion that eligibility requirements continue to be met.

It should not be stated that all material changes are subject to a uniform seven-day notification period. The requirement to submit a complete application seven days before commencement applies to commencement applications, not to all changes. Changes to directors, business scope, address and BO information should each be checked for notification, prior approval and filing requirements, and handled under the latest applicable documents and case-specific FSC conditions.

Risk warning:Treating a prior-approval requirement as a post-event notification may result in implementing a change without authorisation.

Inspection preparation should focus on demonstrating that the business remains within the approved scope, that the size metrics are correctly stated, and that AML/CFT, customer due diligence, recordkeeping, governance, and financial reporting are operating in practice. Sample customer files, monitoring records, and filing receipts may be prepared. The FSC determines the specific scope of an inspection case by case; no uniform inspection cycle or fixed set of items can be promised.

Risk warning:Having complete policy documents without evidence of implementation may make it difficult to demonstrate ongoing compliance.

An annual compliance review may cover client eligibility, size limits, directors and authorised representatives, AML/CFT, filings, fees and remediation, with records prepared for board review. Staff training, outsourcing and complaints should also be included in the risk assessment. These are practical recommendations; whether a review report must be submitted to the FSC should be confirmed separately under applicable requirements.

Risk warning:If a review lists policies but does not track remediation, the same deficiencies may persist.

Expanding business is not necessarily an internal “upgrade” of an Approved Manager. If new services, activities or scale no longer meet the eligibility criteria, an application for a full SIBA investment business licence may be required; other regulated businesses follow separate routes. First identify the actual activity categories, then prepare materials on the business plan, governance, financial resources and risk controls.

Risk warning:Conducting new business solely on the basis of an existing approval may exceed the scope of the authorisation.

Before proceeding with a cancellation, clarify whether this means terminating the Approved Manager approval or dissolving the company; these are not the same procedure. In practice, you can first organise client handover, outstanding liabilities, final filings and record-retention arrangements, then verify the FSC and company registry procedures. A tax clearance certificate or asset-distribution documents should not be listed as uniform requirements for every case.

Risk warning:Arranging company dissolution too early may affect client handovers and the fulfilment of regulatory obligations.

If approval is suspended or restricted, first check the FSC notice to determine which activities may not be carried on, arrangements for customers and subsequent requirements. Remediation materials may explain the causes, evidence of corrective action and measures to prevent recurrence, but the process and conditions for reinstatement must be checked against the case-specific documents. Completing internal remediation does not automatically restore operations or guarantee approval.

Risk warning:Resuming operations on your own without confirmation may breach regulatory restrictions that remain in force.

A change of directors requires separate handling of the Approved Manager regulatory requirements and the company’s director registration, with deadlines and approval or notification steps confirmed against the latest documents. A company-form Approved Manager must always have at least two directors, one of whom is a natural person. Appointment and resignation documents and CVs may be prepared, but the specific mandatory documents should be determined by the applicable forms.

Risk warning:Poor coordination between a departure and a successor's appointment may cause the number of directors to fall below the ongoing requirement.

For a change in business scope, revised business plans, explanations of client and fund eligibility, scale calculations, risk controls and staffing arrangements can be prepared in advance as materials for discussion. Whether a change falls within the original approval, requires FSC confirmation or calls for a separate licence application depends on the actual activities; these materials are not a uniform statutory checklist for every change.

Risk warning:If a new client or fund is ineligible, the manager may no longer satisfy the approval conditions.

A complaints mechanism may include a written policy, accessible channels, independent investigation, internal response targets, written conclusions, recordkeeping and escalation arrangements, with trends reported to management periodically. These are reasonable practical recommendations. Whether a material complaint must be notified to the FSC, and how, should be confirmed in light of the nature of the event, approval conditions and the latest applicable requirements.

Risk warning:A lack of a centralised register may result in duplicate complaints or material issues not being handled.

Records should support traceability of client and fund eligibility, transactions, size calculations, management decisions, AML/CFT and regulatory filings. As a practical matter, electronic materials should be searchable, complete, secure and backed up. Minimum retention periods and starting points for each record category must be verified against the latest applicable materials; do not apply a uniform period taken from another licence.

Risk warning:Electronic records that cannot be read or are missing may make it impossible to establish the facts of transactions and compliance.

An Approved Manager’s regulatory annual return must be submitted by 1 month 31 day each year. Late filing means that a regulatory reporting obligation was not met on time. The specific consequences must be verified under the latest applicable rules and the FSC’s treatment of the particular case; no fixed penalty or inspection frequency should be invented. If a filing is overdue, submit it as soon as possible, explain the reason and correct the internal calendar.

Risk warning:Persistent delays in providing supplementary materials may heighten regulatory concerns about the institution’s compliance capability.

Arrange the audit in accordance with the FSC’s written requirements, confirming the audit scope, auditor qualifications and filing deadline. In practice, books, valuation support and management explanations may be prepared in advance to facilitate the audit and submission of the required statements and explanations; audit working papers should not be submitted wholesale without review.

Risk warning:Failure to complete audits or submit reports as required by the regulator may constitute an ongoing compliance deficiency.

First verify which year, account and filing entity are affected by the error, then correct it using the tax-filing procedure actually applicable, retaining the original filing, the basis for the correction and the receipt. It should not be assumed that a correction must also be made to the FSC. Whether a separate regulatory notification is triggered depends on the nature of the error and the latest applicable documents.

Risk warning:Submitting a correction through the wrong channel may mean that the historical error remains uncorrected effectively.

Monitoring should focus on the statutory caps: aggregate AUM for private/professional funds must not exceed 4 billion US dollars, and aggregate committed capital for closed-ended funds must not exceed 10 billion US dollars; calculate these separately. An early-warning threshold and monitoring of fund eligibility and projected growth may be recommended. There is no general cap on the number of funds.

Risk warning:Using inconsistent AUM and committed-capital measures may result in an actual excess being underreported.

First, correct the deadlines: changes to application information must generally be notified to the FSC in writing within 14 days; exceeding the scale limit must be notified within 7 days. If documents are incomplete, explain the known facts, missing items and plan for subsequent submission within the applicable deadline, and make any required declaration. Do not assume that an initial notice automatically replaces the full requirements or grants an extension.

Risk warning:Applying 7 days to all changes uniformly may result in missing the statutory requirements for different matters.

The best preparation is to demonstrate that controls operate in practice, rather than merely completing templates. Review directors and authorised representatives, fund eligibility and size, AML/CFT records, annual returns, financial statements and regulatory correspondence, and organize responsible persons and remediation evidence. A third-party report is not a uniform requirement for every inspection.

Risk warning:A discrepancy between documented policies and actual practices may expose control deficiencies during an inspection.

A matter that has or may have a material regulatory impact should be notified to the FSC, with the facts explained as required. As a practical matter, report the scope of impact, root cause, interim controls, remediation owner and plan, and retain evidence of progress. The same reporting deadline or closure procedure does not apply to every ordinary review finding.

Risk warning:Delaying the reporting of a deficiency with a material regulatory impact may aggravate the compliance consequences.

Deregistration does not mean that records may be destroyed. Retention should be planned for customer due diligence, business agreements, transaction and financial records, board records and regulatory correspondence, with a custodian and retrieval arrangements identified. Specific periods and starting points must be verified by record type, AML/CFT obligations and exit conditions; a single period should not be applied indiscriminately.

Risk warning:If records become inaccessible or are destroyed too early after dissolution, it may be impossible to respond to regulatory enquiries about past matters.

Suspension of operations does not generally terminate ongoing obligations automatically. Necessary governance, records, client arrangements and any still-applicable reporting and fee obligations should be maintained in accordance with the approval status and FSC conditions. If operations are suspended because eligibility has been lost, notify the FSC immediately and stop accepting new related business; existing business should be handled under applicable transition or exit rules.

Risk warning:Treating a suspension as a complete exemption may result in filing or governance obligations being interrupted.

Prepare a complaint timeline, relevant agreements, transaction and communications records, investigation findings, remedial measures and evidence of remediation, and provide them in accordance with the FSC’s specific requirements. Distinguish verified facts from disputed claims and preserve original records. Submitting documents does not mean that the regulator has endorsed the outcome of the handling.

Risk warning:If a complaint response contradicts the original records, the credibility of the explanation may be undermined.

Approved Manager status alone does not determine CRS classification or specific reporting obligations. First distinguish the manager, fund and other entities, and verify whether each has due-diligence, filing or other responsibilities. If applicable, implement account-information verification, error handling and evidence retention; do not assume that all managers must report client accounts.

Risk warning:Confusing the CRS responsibilities of the manager and the fund may result in omitted or incorrect reporting.

FATCA compliance should begin by confirming the manager’s entity classification and applicable responsibilities, rather than relying solely on BVI incorporation or Approved Manager approval. If the manager has relevant identification or reporting obligations, it is advisable to define processes for collecting account information, identifying the reporting entity, review and correction. Specific channels and deadlines should be confirmed under the latest applicable materials.

Risk warning:Incorrectly concluding that the manager has no compliance responsibilities may result in applicable tax compliance matters being overlooked.

An Approved Manager remains subject to applicable AML/CFT obligations, and an exemption from specific compliance requirements does not waive customer due diligence. Customer identity, BO and source of funds should be covered by the compliance process. Tax-residence information and information-exchange obligations must be assessed separately according to the entity’s status and the latest applicable instruments.

Risk warning:Mistaking a regime exemption for an exemption from due diligence may create a compliance gap.

After receiving a foreign tax-information request, first verify the issuing authority, legal basis, scope of the request and service channel, then handle it under the applicable procedures. Preserve relevant records and have a professional adviser review the matter. Do not assume that reporting to the FSC is always required, and do not provide information overseas without first reviewing the request.

Risk warning:Unauthorized disclosure may harm clients’ interests.

Confidentiality arrangements with customers cannot override disclosure obligations that apply by law, but receiving a request does not mean information may be disclosed without limits. Verify the authority's powers, legal basis, and scope of information, and respond in accordance with law. Customer documents should explain the limits of confidentiality; whether to notify the customer must be determined in light of applicable restrictions.

Risk warning:Excessive disclosure may infringe client privacy.

An Approved Manager may protect the privacy of business information, but cannot provide “confidentiality services” that conceal controllers or obstruct lawful disclosure. Applicable AML/CFT obligations must be met and MLRO and AML reporting arrangements checked; exemptions from specific compliance requirements do not amount to blanket immunity. CRS/FATCA classifications and obligations should be confirmed separately on a case-by-case basis.

Risk warning:Omitting due diligence on the grounds of confidentiality may breach AML/CFT obligations.

Approved Manager status does not automatically authorise independent tax-structuring advisory services. Its core permissions are to provide investment management or investment advisory services within the statutory scope to qualifying funds and related structures. Before providing other services, confirm the applicable licence or written FSC approval, and refer cross-border tax determinations to a suitably qualified tax adviser.

Risk warning:Providing out-of-scope advice independently may exceed the scope of an Approved Manager’s authority.

Information should be disclosed to the extent and through the channels prescribed when an applicable legal duty exists or a valid legal request is made, rather than being transmitted proactively merely because a customer has a tax matter. Tax reporting, requests from competent authorities and the handling of AML suspicious activity are distinct procedures; their respective triggers, recipients and disclosure restrictions must be confirmed against the latest applicable materials.

Risk warning:Mixing up procedures may lead to incorrect disclosures or omission of required reports.

Client information may be protected through access controls, tiered custody, disclosure review and clear privacy notices, while complying with confirmed exchange obligations. These are practical recommendations, not a uniform statutory checklist. Client consent must be distinguished from legal obligations: consent cannot be made a prerequisite for all mandatory disclosures, and absolute non-exchange cannot be promised.

Risk warning:Treating client authorization as the sole basis may impede statutory disclosure.

First understand the customer’s specific privacy needs. Lawful data restrictions and access controls may be discussed, but requests to conceal the true controller, provide false information or obstruct statutory due diligence must not be accepted. If red flags arise, assess them under AML/CFT and MLRO procedures; whether to reject or terminate the relationship should be determined in light of the circumstances.

Risk warning:Accepting a request to conceal the controller may undermine due diligence.

A reduction in reporting scope under a particular structure does not, by itself, establish illegality. However, assistance must not be provided to evade statutory duties through false classification, concealed ownership or inaccurate information. The relevant tax adviser should assess the actual arrangement and latest applicable rules; suspicious indications should be handled under AML procedures, but tax issues should not all be treated as automatically reportable matters.

Risk warning:False classification or concealment of a beneficial owner may result in underreporting and enforcement risks.

Prepare evidence for tax information-exchange reviews by retaining records of entity classification grounds, due diligence, actual filings and disclosure reviews, while protecting privacy through access controls. Periodic sampling and staff training are reasonable practical recommendations. Retention periods, review scope and submission channels must be confirmed under the latest applicable documents; do not apply a uniform period from another licence.

Risk warning:Without evidence of classification or filing, it may be impossible to explain the compliance determination.

Core documents include entity registration and organisational documents, signing authority, director and controller information, a business plan, fund and service-agreement information, and applicable application forms. A crypto strategy should also explain valuation, asset control and risk arrangements. Approved Manager status does not automatically cover VASP services; technical materials should be determined according to the actual activities.

Risk warning:Treating investment management and virtual asset custody as covered by a single authorisation may result in operating beyond its scope.

Professional competence may be evidenced by team biographies, verifiable investment-management experience, digital-asset knowledge and governance responsibilities, together with an explanation of how valuation, liquidity and private-key risks are identified. A third-party assessment may be supporting evidence, but it is not a universally mandatory document and cannot replace the FSC’s assessment of fitness and propriety and organizational capability.

Risk warning:Exaggerating historical performance or technical experience may make application materials misleading.

The risk framework should cover market, liquidity, counterparty, asset custody, smart-contract and operational risks, with appropriate limits, monitoring, stress testing and incident escalation. These are practical recommendations; specific controls should be proportionate to the strategy and permissions. An Approved Manager must continue to maintain appropriate governance and should not treat approval as an exemption from risk management.

Risk warning:Failure to monitor concentrated exposures may cause multiple risks to materialise simultaneously.

The applicable AML/CFT framework should be implemented to cover customer and UBO identification, risk assessment, ongoing monitoring, sanctions screening, suspicious activity reporting and record-keeping. An Approved Manager’s exemption from specific compliance officer or manual requirements does not waive AML/CFT obligations or the need for an MLRO arrangement, and Approved Managers are within the scope of FSC AML reporting.

Risk warning:Mistaking a regime exemption for exemption from due diligence may result in suspicious activities being overlooked.

Technology security should cover key and access management, log monitoring, backups, incident response and disaster recovery, with independent testing arranged according to risk. Multisignature arrangements, penetration testing and testing frequency are optional practical controls and should not be presented as uniform statutory standards. Where VASP activities are involved, submit descriptions of technology controls and testing proportionate to the business.

Risk warning:Concentrating authority in a single person may lead to asset theft or an inability to recover assets.

Before participating in a trial of a new strategy, first confirm whether a formal regulatory framework and admission conditions apply to the activity; do not assume that an Approved Manager automatically has sandbox access. In practice, a trial scope, risk limits, investor protection and exit plan may be prepared. Communicating with the regulator or submitting a proposal does not itself authorise the activity.

Risk warning:Mistaking regulatory communications for approval may result in conducting business without authorization.

Smart-contract upgrades should be included in change control, with proposal, assessment, approval, execution, suspension and resumption authority clearly defined, and version, testing and decision records retained. Multisignature controls are an optional practical measure, not a uniform statutory configuration. Material upgrades should be assessed for their impact on assets, valuation and disclosures, and checked for any regulatory notification requirement.

Risk warning:An upgrade that has not been properly assessed may change control of assets or introduce vulnerabilities.

A manager may assess crypto-asset insurance according to asset-control arrangements and loss scenarios, checking coverage, exclusions and claims conditions for custodian theft, cyberattacks and operational errors. Insurance does not replace asset-protection measures, and no uniform coverage amount has been verified for this topic. Whether insurance is required should be assessed according to the manager’s regulatory status and applicable conditions.

Risk warning:Theft of private keys or third-party incidents may fall within the exclusion clauses.

First contain the harm, preserve evidence and initiate incident escalation; then confirm the notification recipients and deadlines based on the entity’s status, nature of the incident, contracts and latest regulatory documents. If the entity is a VASP and client assets have been unlawfully interfered with or damaged, it must immediately notify affected clients and the FSC. This requirement should not be directly applied to every manager default.

Risk warning:Misjudging reporting obligations may lead to the omission of material events.

Ongoing compliance can be maintained through a compliance calendar, board oversight and clearly assigned regulatory liaison responsibilities. An Approved Manager must submit a regulatory annual return to the FSC by 31 January each year; financial statements are generally due within six months after the financial year-end. Changes to AML filings, business scope and personnel arrangements should also be tracked.

Risk warning:Confusing a company’s annual financial filings with regulatory returns may result in missed filings.