BVI Expands Securities and Investment Business Regulatory Regime

27 April 2010

After a thorough consultation process between the British Virgin Islands ("BVI") Financial Services Commission and industry partners, the BVI government has introduced a new legislative regime to regulate securities and investment business. Funds incorporated in the BVI will have further legal and regulatory support following the enactment of the Securities and Investment Business Act ("SIBA") and the Mutual Fund Regulations (the "Regulations"). SIBA and the Regulations will replace the Mutual Funds Act, 1996 (the "MF Act"). SIBA emphasises the importance of the BVI as a fund domicile and is expected to be enacted shortly. Once enacted, SIBA will be the principal legislation governing investment business in the BVI.

Many of the concepts introduced by SIBA and the Regulations codify existing policies and practices already undertaken by funds domiciled in the BVI in line with accepted international standards. SIBA and the Regulations will also introduce new provisions to regulate investment business, public issues of securities and market abuse. SIBA retains the best aspects of the MF Act and introduces some new and welcomed features, without materially altering the regulatory framework for BVI funds. Importantly, closed-ended funds continue to fall outside the regulatory ambit of SIBA. Existing funds, fund managers and administrators will have respective transition periods in which to fully comply with SIBA.

Please see the attached update for further information.

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