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24 June 2010
BVI - New Securities & Investment Business Legislation
The BVI Securities & Investment Business Act, 2010, (“SIBA”) has passed into law, effective May 17, 2010. It has replaced the BVI Mutual Funds Act as the principal legislation governing the regulation of mutual funds and investment business in the BVI.
The purpose of the legislation is to modernise and enhance the regulatory platform for investment business, demonstrating the BVI’s continued commitment to regulatory supervision that is appropriate for an OECD white-listed jurisdiction.
SIBA covers the following:
- A new investment business licensing regime to regulate investment advisors, investment managers, market makers, brokers, administrators, custodians and operators of investment exchanges.
- The regulation of and restrictions on public issues of securities.
- The repeal of the Mutual Funds Act, 1996, and its replacement with Part III of SIBA and the Mutual Funds Regulations, (“MFR”). Part III also anticipates a Public Funds Code, which is currently under public consultation.
- The introduction of a market abuse regime, with offences in connection with insider dealing, making misleading statements and market manipulation.
Certain aspects of SIBA are subject to transitional provisions for existing funds, which will apply for only a short period of time.
For example, for existing private and professional funds, prescribed accounting and audit standards will take effect by August 3, 2010, along with obligations relating to the number of directors and the appointment of functionaries. An investment warning must also be included in the funds’ offering documents. Changes will also be required to the constitutional documents of professional funds by October 12, 2010.
The above is not a comprehensive list of the actions that must potentially be taken by existing funds and fund managers. We therefore recommend that clients seek legal advice to ensure that they comply with all aspects of SIBA within the relevant timeframe.
For further details, please contact our Client Relationship Manager at (852) 3793 2125.