Guidance Notes on Revocation or Cancellation of Licences or Certificates of Regulated Persons, Including the Approval of Solvent Liquidation Procedures

Summary

These Guidance Notes explain how the BVI Financial Services Commission exercises its powers to revoke or cancel the licence or certificate of a regulated person on request, and to approve the voluntary (solvent) liquidation of a regulated company. They set out the information and confirmations a regulated person must submit before the Commission will grant such approval, supplementing (not replacing) the statutory provisions in the Financial Services Commission Act 2001, the Mutual Funds Act 1996 and the BVI Business Companies Act 2004.

Revocation or cancellation on request

• Written request: A written request for revocation or cancellation must come from the directors, or an authorised/legal representative with written instructions attached.
• Good regulatory standing: Written confirmation that the regulated person is in good regulatory standing (fees, filings, approvals up to date, no pending enforcement action) must be provided.
• Licence/certificate return: The original current licence or certificate must be returned, or if lost, an affidavit from the directors plus a certified copy (if issued).
• Cessation resolution: A board resolution stating the date business ceased or will cease, and confirming no future regulated business without a proper licence.
• Reasons and non-prejudice confirmation: A written explanation of why the business is ceasing, and confirmation that termination is not prejudicial to investors or creditors (not required for re-domiciliation or where business never commenced).
• Auditor confirmation: An auditor's confirmation that all stakeholders have been fully redeemed and there are no outstanding liabilities to investors or creditors (with exceptions for certain restricted/private fund licences and entities without auditors).
• Re-domiciliation cases: Additional statements identifying the new jurisdiction and confirming stakeholders have been notified of the re-domiciliation.
• Never commenced business: Where the entity never carried on regulated business, confirmation and an explanation of why it never commenced must be provided instead.

Approval of solvent liquidation

• Good standing and solvency: Written confirmation of good regulatory standing and of solvency, supported by the most recent audited financial statements and subsequent unaudited statements up to the resolution date.
• No adverse impact: Confirmation that the liquidation will not adversely affect customers or investors.
• Liquidator qualification: Evidence that the proposed liquidator holds an insolvency practitioner's licence, has relevant professional qualifications and sector experience, or qualifies as an eligible liquidator under the BVI Business Companies Act, and is conversant with the relevant legislation.
• Ongoing document requirements: The Commission typically requires copies of the board resolution, notice of appointment, declaration of solvency, Liquidation Plan, Gazette notices, statements of account, and the Certificate of Dissolution as the liquidation progresses.

The Commission retains discretion to request further clarification, evidence or affidavits at any stage before granting approval for revocation, cancellation or liquidation.

Key obligations

• Submit a written request for revocation or cancellation, signed by directors or a duly instructed authorised/legal representative
• Provide written confirmation that the regulated person is in good regulatory standing before revocation or cancellation can proceed
• Return the original current licence or certificate to the Commission, or provide an affidavit and certified copy if it is lost
• Provide a board resolution stating the cessation date of regulated business and confirming no future regulated activity without proper licensing
• Provide a written explanation of the reasons for ceasing business and confirmation that termination is not prejudicial to investors or creditors
• Obtain and submit an auditor's confirmation that all stakeholders have been redeemed and no liabilities remain outstanding, where applicable
• For re-domiciliation, provide a statement identifying the new jurisdiction and confirmation that stakeholders have been notified
• For entities that never commenced business, provide confirmation and an explanation of why business was never commenced
• For solvent liquidation approval, provide confirmation of good regulatory standing and solvency supported by audited and subsequent unaudited financial statements
• Demonstrate that the proposed liquidator is appropriately qualified, experienced and conversant with relevant financial services legislation
• File the notice of appointment of the liquidator, declaration of solvency and Liquidation Plan with the Registry of Corporate Affairs within 14 days of the board resolution, and provide copies to the Commission
• Provide the Commission with ongoing liquidation documents including Gazette advertisements, statements of account, and the Certificate of Dissolution

Applies to

regulated persons, licensees, mutual fund entities (certificate holders), companies that are regulated persons under the BVI Business Companies Act, voluntary liquidators, insolvency practitioners

Deadlines

• within 14 days of the board resolution: The notice of appointment of the liquidator, declaration of solvency, and Liquidation Plan must be filed with the Registry of Corporate Affairs within this period.