Financial Services (Exemptions) Regulations (Revised 2020)

Summary

This regulation sets out exemptions from the licensing requirements of the Banks and Trust Companies Act for private trust companies and bare trustees operating in the Virgin Islands. It defines when a private trust company can operate without a trust licence, and imposes ongoing conditions and monitoring duties to preserve that exemption.

Private trust companies

• Exemption scope: A private trust company is exempt from needing a trust licence if its trust business consists solely of unremunerated trust business or related trust business (business for a single qualifying trust or group of related qualifying trusts).
• Registered agent requirement: The private trust company must at all times have a registered agent who holds a Class I trust licence.
• Business restrictions: The company must not carry on business other than trust business, must not solicit trust business from the public, and must not carry on trust business beyond unremunerated or related trust business.
• Loss of exemption: If a private trust company no longer qualifies for the exemption it must forthwith amend its memorandum to remove the statement that it is a private trust company; carrying on trust business without the exemption is treated as unauthorised financial services business.
• Regulatory oversight: Enforcement provisions of the Financial Services Commission Act (investigation, directives, cost recovery) apply to private trust companies as if they were licensees, under specified conditions.

Registered agent duties

• Pre-appointment checks: A Class I trust licence holder must take reasonable steps to satisfy itself that a private trust company complies (or will comply) with the trust business restrictions before agreeing to act as its registered agent.
• Ongoing monitoring: The registered agent must periodically review, on a risk based frequency it determines itself, whether the private trust company continues to comply with those restrictions.
• Record keeping: The registered agent must keep up to date copies of trust deeds and supporting compliance documentation at its Virgin Islands office.
• Reporting non-compliance: If the registered agent forms the opinion that a private trust company is not complying, it must immediately notify the Commission in writing.

Bare trustees

A company acting solely as a bare trustee is not required to obtain a trust licence under the Banks and Trust Companies Act; any criteria in the Regulatory Code for determining bare trustee status apply for this purpose.

Key obligations

• A private trust company must ensure that its registered agent holds a Class I trust licence at all times in order to retain its exemption from licensing.
• A private trust company must not carry on business other than trust business, solicit trust business from the public, or conduct trust business other than unremunerated or related trust business.
• If a private trust company loses entitlement to the exemption, it must forthwith amend its memorandum to remove the statement that it is a private trust company.
• A registered agent must take reasonable steps, before agreeing to act, to satisfy itself that a private trust company complies (or will comply) with the trust business restrictions.
• A registered agent must periodically review the private trust company's continued compliance with the trust business restrictions, at a frequency based on its own risk assessment.
• A registered agent must keep up to date copies of each relevant trust deed and supporting compliance documentation at its office in the Virgin Islands.
• A registered agent must immediately notify the Commission in writing if it forms the opinion that a private trust company is not complying with the trust business restrictions.

Applies to

private trust companies, registered agents holding a Class I trust licence, bare trustees, licensees under the Banks and Trust Companies Act

Deadlines

• 4 weeks following the date the registered agent ceases to hold a Class I trust licence: Grace period during which a private trust company does not lose the benefit of the exemption despite its registered agent no longer holding a Class I trust licence.
• forthwith: A private trust company that is not entitled to the exemption must amend its memorandum to remove the private trust company statement.