FSC Approved Investment Managers Guidelines (Consolidated 25 February 2014)

Summary

These BVI Financial Services Commission guidelines explain the framework under the Investment Business (Approved Managers) Regulations, 2012 that lets certain investment managers and advisers operate without obtaining a full licence under the Securities and Investment Business Act, 2010 (SIBA). They set out who can qualify as an Approved Investment Manager, the application process, permitted activities, asset-under-management limits, and ongoing obligations once approved.

• Who can apply: Persons wishing to provide investment management or investment advice to private funds, professional funds, closed-ended funds, affiliated persons, or equivalent non-BVI structures, as described in regulation 9 of the Regulations.
• Application process: Applicants must submit a completed Form IB-A1 with supporting documents and the application fee, at least seven days before the intended commencement of activities (unless the Commission agrees to a shorter period).
• Commission review: The Commission aims to decide on complete applications within 30 days of submission (or within any extension granted), and may request clarification or additional information during this period.
• Approval finality: Approval only becomes final once the requisite approval fee is paid; incomplete applications or those missing required information/fees may be denied.
• Business activity limits: Approved Investment Managers may only carry out the investment business functions specified in regulation 9, and must meet defined criteria for private funds (no more than 50 investors or private-basis offering), professional funds (professional investors, minimum $100,000 initial investment), and closed-ended funds.
• Assets under management caps: Aggregate assets under management for private or professional funds may not exceed $400 million; for closed-ended funds, assets under management may not exceed $1 billion.
• Ongoing obligations: Approved Investment Managers must comply with general ongoing obligations, submit financial statements (unless exempted), and file annual returns as prescribed.
• Ceasing to qualify: A manager who ceases to qualify as an Approved Investment Manager must immediately notify the Commission, stop taking on new relevant business, and wind down existing relevant business within three months (extendable by a further three months to seek a SIBA licence).
• Renewal: Continued approval requires payment of a renewal fee.

The guidelines apply to applications made in accordance with the Regulations and are intended to be relied upon by the Commission when processing approval applications, so applicants are expected to follow them closely.

Key obligations

• Applicants must submit a completed Form IB-A1 application with all required supporting documents and the application fee no less than seven days before the intended commencement of the relevant investment activities, unless the Commission agrees in writing to a shorter period.
• Applicants must respond to any Commission request for clarification or additional information within the thirty-day review period (or any extension granted), or notify the Commission promptly if the information cannot be provided.
• Approval is only final once the prescribed approval fee has been paid to the Commission.
• Approved Investment Managers must keep aggregate assets under management for private or professional funds within $400 million and for closed-ended funds within $1 billion.
• Approved Investment Managers must submit financial statements (unless exempted) and file annual returns as required under the Regulations.
• Approved Investment Managers must pay a renewal fee to maintain approval.
• A person who ceases to qualify as an Approved Investment Manager must notify the Commission immediately, cease taking on new relevant business, and stop carrying on existing relevant business within three months of ceasing to qualify (with a possible further three-month extension to obtain a SIBA licence).

Applies to

Approved Investment Managers, investment managers, investment advisers, private funds, professional funds, closed-ended funds, mutual funds, persons affiliated with private, professional or closed-ended funds

Deadlines

• no less than seven days prior to the intended commencement date of the relevant activities: Deadline for submitting a completed application (Form IB-A1) with supporting documents, unless the Commission agrees to a shorter period.
• within 30 days from submission of the application: Period within which the Commission will endeavour to process an application and communicate its decision (or within any extension granted).
• within the thirty days provided (or any extension): Deadline for applicants to provide clarification or additional information requested by the Commission.
• within three months from the date of ceasing to qualify: Period within which a person who ceases to qualify as an Approved Investment Manager must stop carrying on existing relevant business.
• additional three months: Possible extension the Commission may grant to apply for and obtain a SIBA licence after ceasing to qualify as an Approved Investment Manager.
• 10th December 2012: Commencement date of the Guidelines/Regulations framework.