The new regime introduced pursuant to the Investment Business (Approved Managers)Regulations, 2012 is aimed at non-institutional managers and advisors of BVI funds and provides a welcome regulatory alternative to applying for a full investment management or advisory licence under Part I of the Securities and Investment Business Act, 2010 ("SIBA").
To qualify as an "Approved Manager" under the new regime the investment manager or advisor must:
- be a BVI company or limited partnership
- act as manager or advisor to a private or professional fund recognised under SIBA (which may include funds domiciled outside of the BVI), a closed-ended fund domiciled in the BVI which has the key characteristics of a private or professional fund or a foreign fund investing substantially all of its assets in a BVI domiciled fund
- satisfy the Financial Services Commission's (the "Commission") fit and proper test
- maintain, in the case of open-ended funds, aggregate assets under management of less than US$400 million and, in the case of closed-ended funds, aggregate capital commitments of less than US$1 billion
- file an application for approval not less than seven days prior to the intended commencement of business
The new regime is cost effective (a US$1,000 application fee is payable with an annual fee of US$1,500 thereafter) as well as efficient, allowing the relevant fund manager or advisor to commence business seven days after submission of its application without having to wait for formal approval from the Commission.
An Approved Manager will be subject to less onerous on-going regulatory obligations than a manager or advisor who holds a full licence under Part I of SIBA but is still regarded as a regulated entity and so subject to enforcement action by the Commission. It will need to appoint at least two directors, file an annual return with the Commission and prepare and submit annual financial statements which need not be audited. The Approved Manager will remain under an on-going duty to notify the Commission of any changes to the information provided to the Commission in its application for approval and of any matter which has a material impact on the Approved Manager or its business.
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