Fund Financials Guidelines 2019

Summary

These Guidelines from the BVI Financial Services Commission set out how mutual funds and private investment funds may apply for exemptions and extensions relating to their financial statement and audit obligations under SIBA, the Mutual Funds Regulations, the Private Investment Funds Regulations, and the Incubator and Approved Funds Regulations. They elaborate on existing statutory requirements rather than creating new substantive rules, explaining what information must accompany applications and the fees payable.

• Exemption from submitting financial statements: Public, private, professional, incubator, approved and private investment funds may apply to be exempted from preparing and submitting audited financial statements for a given financial year, in specified circumstances (dormant funds, small funds, feeder funds, funds in liquidation, NAV suspension, etc).
• Exemption from appointing an auditor: Private and professional funds may apply to be exempted from the requirement to appoint an auditor, subject to similar qualifying circumstances, and must immediately notify the Commission and reappoint an auditor if those circumstances change.
• Extension of time for financial statements: Funds with a reasonable explanation may apply for an extension of time to submit financial statements beyond the standard 6 month post financial year end deadline, up to specified maximums.
• Approval of alternative auditing standards: Funds whose auditor wishes to use an auditing standard not already accepted under the Regulations may apply for the Commission's case by case approval, supported by an equivalence assessment.
• Applicable fees: The Appendix sets out fees ranging from $250 to $750 depending on the type of application and fund.

The Guidelines confirm that late or non compliant applications will not be considered, meaning the fund must still submit financial statements within the standard 6 month timeframe or face potential enforcement action.

Key obligations

• Public funds must prepare and submit financial statements within 6 months (3 months if the fund conducted business during the year) after the fund's financial year end unless an exemption or extension is granted.
• Private, professional, incubator, approved funds and private investment funds must prepare and submit financial statements within 6 months after the fund's financial year end unless exempted or granted an extension.
• Public funds and private and professional funds must have an auditor appointed at all times unless an exemption has been granted.
• Applications for an exemption from financial statement requirements must be submitted within the specified timeframe (6 months, or 3 months for active public funds) after the relevant financial year end, and must include the fund's rationale, unaudited financial statements (where applicable), confirmation of good regulatory standing, evidence of investor consent, and details of the fund's circumstances.
• Applications for an exemption from the auditor appointment requirement must include rationale, evidence of investor awareness/consent, latest unaudited financial statements, and details of the fund's current circumstances.
• A fund granted an exemption from appointing an auditor must immediately notify the Commission if its circumstances change and take steps to appoint an auditor.
• Applications for an extension of time to submit financial statements must be made where a fund has a reasonable explanation for being unable to meet the 6 month deadline, subject to maximum extension periods (6 months for public funds; 9 months for private, professional and private investment funds).
• A fund whose auditor wishes to use an auditing standard not already accepted must apply to the Commission with the standard's details, issuing body, a copy of the standard, an equivalence assessment, and a case for approval.
• All applications must be accompanied by the relevant application fee set out in the Appendix.
• Applications submitted after the relevant timeframe will not be considered, and the fund must submit financial statements within 6 months of the financial year end or be subject to enforcement action.

Applies to

public funds, private funds, professional funds, private investment funds, incubator funds, approved funds, mutual funds, fund auditors

Deadlines

• within 6 months after the fund's financial year end: Standard deadline for public funds (that never commenced business), private funds, professional funds, private investment funds, incubator funds and approved funds to prepare and submit financial statements, and the deadline for submitting exemption applications for those fund types.
• within 3 months after the relevant financial year end: Deadline for public funds that conducted business during the financial year to submit financial statements or exemption applications.
• maximum extension of 6 months: Maximum extension of time for public funds to submit financial statements.
• maximum extension of 9 months: Maximum extension of time for private funds, professional funds and private investment funds to submit financial statements.
• 31 December 2019: Commencement date of the Fund Financials Guidelines 2019.