Amendments to BVI Legislation

KEY POINTS

• ROD required for restored and continued in companies.
• CGS may be requested within the first 6 months and 21 days of incorporation.
• Policy for the annual valuation of fund property.
• New regulatory regime for closed-ended funds.
• Regulations for Recognized Foreign Funds.

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Certain amendments were made to the BVI legislation in late December 2019. These included changes to the Business Companies Act, the Securities and Investment Business Act and Regulations, the Insolvency Act, the Mutual Funds Regulations, the Mutual Funds (Foreign Funds) Regulations, the Private Investment Business Regulations and the Limited Partnership Act.

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BVI BUSINESS COMPANIES ACT, 2004

The following amendments were made with respect to the filing requirements of the register of directors (”ROD”) for companies continued in to the BVI and for companies being restored to the register:

• A company continued in to the BVI shall file the initial copy of the register of directors within 21 days of its continuation.
• A company that is struck off the register of companies but not dissolved, may be restored by the Registrar upon receipt of the required restoration application, a copy of its ROD, payment of the restoration fees and all outstanding fees and penalties.
• A request for a Certificate of Good Standing for a company will be granted if requested (i) during the first 6 months (period by which directors must be appointed) and within 21 days (period by which the Register of Directors must be filed once its first directors are appointed at the end of the 6 month period) and (ii) within 21 days of the company’s continuation in to the Virgin
  Islands.

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ANTI-MONEY LAUNDERING (AMENDMENT) REGULATIONS 2019

The definition of “relevant business” now includes a “private investment fund”.

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LIMITED PARTNERSHIP (AMENDMENT) ACT 2019 (“LPA”)

The LPA has been amended to provide for the International Tax Authority (“ITA”) to apply to the Court for the winding up of a limited partnership where it has been determined by the ITA that it has been carrying out a relevant activity in breach of the economic substance requirements.

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SECURITIES AND INVESTMENT BUSINESS (INCUBATOR AND APPROVED FUNDS) (AMENDMENT) REGULATIONS 2019

The main amendments made are as follows:

• The definition of “fund property” in relation to an incubator fund or an approved fund means the assets of the fund.
• An incubator fund and an approved fund must maintain a clear and comprehensive policy for the annual valuation of fund property. The policy must be appropriate for the nature, size, complexity, structure and diversity of the fund and fund property.
• The fund must ensure the persons controlling the fund’s investment function are independent from the persons controlling the fund’s valuation process and, where applicable, identify, manage and monitor any potential conflicts of interest that may arise.
• The fund must have arrangements in place for the safekeeping of fund property including provisions for the appropriate segregation of fund property.
• A penalty limit of $2,000 applies where the fund fails to pay its annual approval fee.

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SECURITIES AND INVESTMENT BUSINESS (AMENDMENT) ACT,
2019 PRIVATE INVESTMENT FUND REGULATIONS, 2019

Private Investment Funds

The BVI has historically regulated only open-ended collective investment schemes that have fallen within the definition of a “mutual fund” or “fund” under the Securities and Investment Business legislation. The BVI has now introduced a regulatory regime for closed-ended funds in response to the EU requirements that close-ended collective investment schemes should also be regulated.

A closed ended fund is an entity which:

(i) collects and pools investor funds for the purpose of collective investment and diversification of portfolio risk; and

(ii) issues fund interests, which entitle the holder to receive an amount computed by reference to the value of a proportionate interest in the whole or in part of the net assets of the company, partnership, unit trust or other body.

Existing closed-ended funds are required to apply to the BVI Financial Services Commission for recognition as a Private Investment Fund before 1 July 2020.

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Recognition as a Private Investment Fund

In order to be recognized as a Private Investment Fund:

(i) the fund must be lawfully incorporated, registered, formed or organized under the laws of the BVI or elsewhere;

(ii) the fund’s constitutional documents must specify that:

a) the fund is not authorized to have more than 50 investors, or
b) an invitation to subscribe for or purchase fund interest shall be made on a private only basis; or
c) the fund interest shall be issued only to professional investors, with an initial investment of each professional investor, other than an exempted investor, not being less than US$100,000; and

(iii) the fund must meet such criteria as may be specified in the Regulations;
(iv) the fund on recognition will be compliant with the Act, the Regulations and any practice direction applicable to the fund; and
(v) recognizing the fund is not against the public interest.

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Regulatory Obligations

Closed ended funds will be required to have the following:

(a) a valuation policy;
(b) “appointed persons” for the management of fund property, valuation of fund property and safekeeping of fund property;
(c) an auditor;
(d) an authorized representative;
(e) at least two directors;
(f) audited financial statements which must be submitted to the BVI FSC within 6 months of the financial year end; and
(g) to pay an annual private investment fund recognition fee of US$1,000 per year;
(h) to notify the BVI FSC within 7 days of any change in an appointed person;
(i) to notify the BVI FSC within 14 days of any change in director, authorized representative, auditor, address, constitutional documents, offering document, valuation policy;
(j) to maintain financial records.

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MUTUAL FUNDS (AMENDMENT) REGULATIONS, 2019

The Amendment introduced the following changes:

• A new definition of “fund property” with respect to a private or professional fund. Where the fund is a BVI business company or a partnership, the fund property is the assets of the fund. Where the fund is a unit trust, the fund property is the assets subject to the trust deed that constitutes the fund.
• A private or professional fund must maintain a clear and comprehensive policy for the annual valuation of fund property. The policy must, among other things, be appropriate for the nature, size, complexity, structure and diversity of the fund and fund property.
• A private or professional fund must ensure that the fund’s manager, or such other person having responsibility for the investment function, the persons controlling the fund’s investment function is independent from the fund’s administrator, or such other persons having responsibility for the valuation process.
• Where a private or professional fund determines that the fund’s manager, or such other person having responsibility for the investment function, must be the same as the administrator or such other person having responsibility for the valuation of fund property, the private or professional fund shall.

(a) identify, manage and monitor any potential conflicts of interest that may arise; and
(b) disclose to investors in the fund

(i) that the fund’s manager or such other person having responsibility for the investment function is the same as the fund’s administrator or such other person having responsibility for the valuation function; and
(ii) details of how any potential conflicts of interest will be managed.

• A private or professional fund’s financial statements must be prepared in accordance with certain international standards as set out in the Regulations.

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MUTUAL FUNDS (FOREIGN FUNDS) REGULATIONS, 2019

A fund which is incorporated and already operating in another jurisdiction may apply to become a recognised foreign fund in the BVI. A foreign fund may apply for recognition as a foreign fund in the BVI if it intends to offer its shares to investors in the BVI or otherwise intends to carry out its business in or from within the BVI.

The Mutual Fund Foreign Regulations are intended to cover the application for recognition and regulatory aspects of a recognised foreign funds.

Clients are advised to review their structures in view of these amendments to determine if they meet the new requirements.

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英屬維京群島法律修正

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關 鍵 重 點

• 復名及存續公司必須提交董事名冊
• 公司可在其登記設立起前6個月及21日內申請合法存續證明
• 基金財產年度估值政策
• 封閉型基金的新設監管制度
• 經認可外國基金的法規

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2019年12月下旬英屬維京群島法律進行若干修正，包括商業公司法、證券暨投資事業法與規則、破產法、共同基金規則、共同基金（外國基金）規則、私人投資事業規則、有限合夥公司法等的修正。

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2004年英屬維京群島商業公司法

對於在維京群島存續及登記復名的公司，其董事名冊申報規定修正如下：

• 在維京群島存續的公司，應在其存續起21日內提交第一份董事名冊。
• 已被公司登記處除名但未解散的公司，在登記處接獲其復業申請書、一份董事名冊、復業申請費及所有應付未付規費及罰款的給付款後，即可令其復業。
• 倘若符合下列要求，公司將准許公司存續良好證明的請求：
  （i）在前六個月内（必須任命董事）及21天内（首任董事於六個月內任命完成，此時必須歸檔首次董事名冊）;及
  （ii）21天內公司遷入於維京群島。

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2019年洗錢防制（修正）規則

「相關業務」的定義，現在亦包括「私人投資基金」。

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2019年有限合夥公司（修正）法（「有限合夥公司法」）

有限合夥公司法經修正後的規定，使國際稅賦管理局在認定某家有限合夥公司違反經濟實質規定經營相關業務時，得向法院聲請關閉該有限合夥公司。

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2019年證券暨投資事業（孵化基金與獲准基金)（修正）規則

主要修正規定如下：

• 孵化基金或獲准基金的「基金財產」定義，係指該基金的資產。
• 孵化基金或獲准基金對於基金財產的年度估值必須實施明確且全方位的政策。該政策必須適用於基金與基金財產的性質、規模、複雜性、結構及多樣性等。
• 基金必須確保，控制基金投資職務的人獨立於控制基金估值程序的人之外，且在適用的情形下，亦須確認、管理、監督可能發生的任何潛在利益衝突。
• 基金必須妥善安排基金財產的保管，包括適當隔離基金財產的規定等。
• 基金未繳納年度核准費者，可能遭處以最高$2,000元的罰款。

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2019年證券暨投資事業（修正）法
2019年私人投資基金規則

私人投資基金

英屬維京群島歷來只監管屬於證券暨投資事業法規所定義「共同基金」或「基金」的開放型集合投資計畫。為回應歐盟對於封閉型集合投資計畫亦應納入監管的要求，英屬維京群島現在亦引用一套封閉型基金監管制度。

封閉型基金即從事下列業務的實體：

(i) 募集及集合投資人資金，目的在於進行集合投資及分散投資風險；及

(ii) 發行基金股權，使持有人有權獲得以該公司、合夥企業、單位信託或其他機構全部或部分淨資產價值按股權比例計算的金額。

既有的封閉型基金，必須在2020年7月1日前向英屬維京群島金融服務委員會（Financial Services Commission）申請認可為私人投資基金。

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認可為私人投資基金

基金必須符合下列規定，始得認可為私人投資基金：

(i) 基金必須依英屬維京群島或他國法律合法設立、登記、成立或組織。
(ii) 基金的章程文件必須明訂下列事項：

a) 基金不得擁有超過50個投資人；或
b) 邀請認購或購買基金股權僅得以私募方式為之；或
c) 基金股權僅得發行給專業投資人，每個專業投資人（經豁免的投資人除外）的首次投資額不得少於美元100,000元。

(iii) 基金必須符合法規所訂定的標準。
(iv) 基金在被認可後即遵守適用於該基金的法律、規則及任何執業指令。
(v) 認可該基金並不違反公共利益。

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監管義務

封閉型基金必須具備下列項目：

(a) 一項估值政策。
(b) 負責管理、估值及保管基金財產的「指定人」。
(c) 一名審計人員。
(d) 一名授權代表人。
(e) 至少兩席董事。
(f) 必須在財務年度終了後6個月內向英屬維京群島金融監督員會提交的經查核財務報表。
(g) 每年繳納私人投資基金認可年費美元1,000元。
(h) 指定人有任何變更時，在變更後7日內通知英屬維京群島金融監督委員會。
(i) 董事、授權代表人、查帳人、地址、章程文件、報價文件、估值政策有任何變更時，在變更後14日內通知英屬維京群島金融監督委員會。
(j) 留存財務記錄。

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2019年共同基金（修正）規則

本次修法進行了下列修改：

• 對於私人基金或專業基金的「基金財產」給予新定義。基金是英屬維京群島商業公司或合夥企業時，基金財產是指基金的資產。基金為單位信託時，基金財產則指構成基金的信託契書所規定的資產。
• 私人基金或專業基金對於基金財產的年度估值必須實施明確且全方位的政策。該政策必須適用於基金與基金財產的性質、規模、複雜性、結構及多樣性等。
• 私人基金或專業基金必須確保，基金經理人或其他負責投資職務的人或控制基金投資職務的人，獨立於基金管理人或其他負責估值程序的人之外。
• 若私人基金或專業基金決定，基金經理人或其他負責投資職務的人，必須與基金管理人或其他負責基金財產估值的人相同，則該私人基金或專業基金應：

(a) 確認、管理、監督可能發生的任何潛在利益衝突。
(b) 向基金投資人揭露下列事項：
(i) 基金經理人或其他負責投資職務的人，與基金管理人或其他負責基金財產估值的人相同。
(ii) 如何管理任何潛在利益衝突的細節。

• 私人基金或專業基金的財務報表，必須依據法規明訂的特定國際標準編製。

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2019年共同基金（外國基金）規則

已在他國設立及經營的基金，得申請變成英屬維京群島認可的外國基金。外國基金若擬在英屬維京群島提供其股份給投資人，或擬在英屬維京群島或從英屬維京群島境內經營其業務者，則其得在英屬維京群島申請認可為外國基金。

共同基金（外國基金）法的規範，意在涵蓋基金認可申請及經認可外國基金的監管事項。

建議客户依這些修正法案審閲其架構，以確定是否符合新規定要求。