Transition Period for BVI Mutual Funds Act of 1996 Ends on December 31, 2010
Sponsors with funds located in the BVI should be aware that at the beginning of next year there will be a new regulatory regime. Starting on January 1, 2011, all funds must comply with the requirements of the Securities and Investment Business Act, 2010 (“SIBA”) instead of the current Mutual Funds Act, 1996 (“MFA”).
The new laws are much stricter than the previous laws and continue the push by the BVI Financial Services Commission (FSC) to maintain greater oversight of funds located in the BVI. Managers with BVI funds should pay careful attention to the new laws and make revisions to their documents or operations accordingly.
Below is an overview of the major new requirements under the SIBA:
- Disclaimer on Offering Documents – in the event a fund offers interests or shares on or after December 31, 2010, the fund offering documents must be amended to include the prescribed investment warning under the new law. The subscription agreements must also include an acknowledgement from any new investor that it has received, understood and accepted the investment warning.
- Note: these documents must be filed with the Financial Services Commission (“Commission”) within 14 days of their issue.
- 2 Directors viagra canada – all private funds must at all times have at least 2 directors (at least 1 of which is an individual).
- Note: a change of the board (and auditor) must be filed with the Commission within 14 days.
- Manager, Administrator, and Custodian – all private funds must have a manager, an administrator, and a custodian which is independent from the manager and administrator.
- Note: funds may apply to the Commission from an exemption from the requirement to have a custodian or a manager.
- Appointing a new custodian, administrator, prime broker, or manager must be reported to the Commission at least 7 days prior to the appointment.
- Audited accounts must be filed within 6 months of the financial year end.
- 14 days notice to the Commission is also required for change in place of business and amendments of constitutional or offering documents.
- Annual returns must be filed by June 30 of each year.
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Bart Mallon, Esq. is a hedge fund attorney and works with a variety of domestic and offshore hedge fund manager. He can be reached directly at 415-868-5345.