Banks and Trust Companies Act (Revised Edition 2020)

Summary

This is the British Virgin Islands' Banks and Trust Companies Act (Revised Edition 2020), the core statute licensing and regulating banking business, trust business and related company management business carried on in or from the Virgin Islands. It is administered by the BVI Financial Services Commission and sets out licensing requirements, ongoing obligations for licensees, and offences for non-compliance.

• Licensing prohibition: No person may carry on banking business, and no company may carry on trust business or company management business, in or from the Virgin Islands without a valid licence issued by the Commission.
• Application and grant: Licences are obtained by written application to the Commission in the approved form; the Commission grants a licence only if satisfied on fitness and propriety, adequacy of organisation, management and financial resources, and public interest grounds.
• Principal office and agents: A licensee must designate a principal office in the Virgin Islands and two Virgin Islands resident individuals as authorised agents, and obtain the Commission's prior written approval before changing either.
• Notification duties: Licensees must notify the Commission within fourteen days of any change to the particulars given in their licence application.
• Financial reporting and audit: Licensees must keep financial records, prepare and submit financial statements (including quarterly statements for some licensees) to the Commission, and appoint an approved auditor.
• Regulatory Codes: The Commission must issue Regulatory Codes covering matters such as problem asset management, consolidated supervision of banking groups, and safeguarding of client assets by non-bank licensees.
• Offences and penalties: Carrying on unlicensed banking, trust or company management business, or contravening notification and other requirements, is a criminal offence carrying fines (up to $50,000 for unlicensed business) and/or imprisonment.

The Act also allows the Commission to require licensees to hold insurance, provides for appeals to the Financial Services Appeals Board against certain Commission decisions, and empowers the Cabinet and Commission to make regulations and Regulatory Codes to implement the Act.

Key obligations

• No person may carry on banking business in or from the Virgin Islands without a valid licence (section 3(1))
• No company may carry on trust business in or from the Virgin Islands without a valid licence (section 3(2))
• No company may carry on company management business in or from the Virgin Islands without a valid licence (section 3(2A))
• A licence application must be made in writing to the Commission in the approved form (section 4(1))
• A licence must be prominently displayed at the licensee's premises, including head office and every branch (section 4(7))
• A licensee must notify the Commission within fourteen days of any change in the particulars set out in its licence application (section 8(1))
• A licensee must designate a principal office in the Virgin Islands and two Virgin Islands resident authorised agents, and obtain prior written Commission approval before changing either (section 9)
• A person carrying on banking or trust business at the Act's commencement has three months to comply with the trust provisions of the Act (section 7)
• Licensees must keep financial records and prepare, submit and, where required, publish financial statements to the Commission, including quarterly statements for certain licensees (sections 17 to 17K)
• Licensees must appoint an auditor meeting prescribed qualification criteria (section 17G)
• Non-bank licensees may be required under Regulatory Codes to segregate client assets, use dual signature controls for client monies, and reconcile client accounts promptly (section 28A)

Applies to

banks, trust companies, licensees carrying on banking business, licensees carrying on trust business, licensees carrying on company management business, auditors of licensees

Deadlines

• 14 days: Licensee must inform the Commission of any change in the particulars set out in its licence application within fourteen days of the change occurring.
• 3 months from commencement of the Act: A person carrying on banking or trust business at the Act's commencement had three months to comply with the trust provisions of the Act.

Related documents

• Banks and Trust Companies (Amendment) Act, 2022 amends this document
• Banks and Trust Companies (Amendment) Act, 2023 amends this document
• Banks and Trust Companies (Amendment) Act, 2024 amends this document