Financial Services (Miscellaneous Exemptions) Regulations (Revised 2020)

Summary

This is a BVI Financial Services Commission statutory instrument that sets out a series of exemptions from otherwise-applicable requirements under the Financial Services Commission Act, the Insurance Act, the Financing and Money Services Act, the Securities and Investment Business Act, and other regulatory legislation. It works via five schedules, each carving out specific relief for defined categories of licensee, generally either automatically or upon written application to and approval by the Commission.

• Compliance officer exemptions (Schedule 1): Certain licensees (captive and credit life insurers, private/professional/public/recognised foreign/private investment/incubator/approved funds, and small trust, investment business or company management licensees meeting specified conditions) are exempt from appointing or seeking approval of a compliance officer, subject to subscribing to a Form C declaration; other licensees may apply for a discretionary exemption for a non-refundable $100 fee; rules also govern temporary absence of a compliance officer.
• Insurance Act exemptions (Schedule 2): Lloyd's registered brokers, cover holders, members and syndicates are exempt from insurance intermediary approval in defined circumstances; credit life insurers are exempt from the statutory auditor appointment requirement unless the Commission directs otherwise, and may be required to submit unaudited financial statements instead.
• Money services exemption (Schedule 3): BVI business companies not based in, or not conducting, currency exchange or money order/traveller's cheque business in the Virgin Islands are exempt from licensing under the Financing and Money Services Act, provided that business is carried on in a recognised jurisdiction.
• Incidental investment business (Schedule 4): A licensee under other financial services legislation may apply to the Commission for exemption from obtaining a separate Securities and Investment Business Act licence where the proposed activity is incidental to its existing licensed business.
• Share transfer and audited financial statement exemptions (Schedule 5): Publicly traded licensees are exempt from seeking Commission approval for share transfers or acquisitions of significant interests; dormant or otherwise qualifying licensees, and certain funds, may apply to be exempted from preparing and submitting audited financial statements.

The regulations do not remove the underlying compliance functions themselves; licensees remain subject to their general compliance obligations under the Financial Services Commission Act, the Regulatory Code and applicable regulatory legislation except where an exemption specifically applies.

Key obligations

• A licensee relying on the compliance officer exemption for categories (f), (g) or (h) in Schedule 1 must subscribe to the declaration in Form C of the Commission's Guidelines for the Approved Persons Regime.
• A licensee applying for a discretionary compliance officer exemption under Schedule 1 paragraph 2 must submit a written application stating its reasons, accompanied by a non-refundable fee of $100 (or higher prescribed amount).
• Where an approved compliance officer is absent for longer than 5 days but within the temporary absence thresholds, the licensee must appoint a competent individual from within the licensee to perform the compliance officer's duties.
• A licensee seeking exemption from audited financial statements for a year in which it conducted no business must apply in writing within the period when the audited financial statements are due (or, if extended, within the extension period).
• A licensee that conducted business activity but seeks exemption from audited financial statements on other grounds must apply in writing at least three months before the audited financial statements are due.
• Any application for exemption under Schedule 5 paragraph 2(2), (3) or (3A) must state the reason for the application.
• If an application for exemption from audited financial statements is refused, the applicant must comply with the applicable audited financial statement requirements (Mutual Funds Regulations regulation 10, Private Investment Funds Regulations 2019 regulation 10, or the relevant regulatory legislation and Regulatory Code, as applicable).

Applies to

captive insurers, credit life insurers, private funds, professional funds, public funds, recognised foreign funds, private investment funds, incubator funds, approved funds, Class I, Class II and restricted Class II trust licensees, Class III and restricted Class III trust licensees, company management licensees, investment business licensees, domestic insurers, Lloyd's registered brokers, cover holders, members and syndicates, BVI business companies engaged in money services, licensees under the Banks and Trust Companies Act, licensees under the Company Management Act, licensees under the Insurance Act, licensees under the Financing and Money Services Act, licensees under the Securities and Investment Business Act

Deadlines

• within the period when the audited financial statements are due (or if extended, within the period of extension): Deadline to apply for exemption from audited financial statements where the licensee conducted no business activity for the year.
• at least three months before the audited financial statements are due: Deadline to apply for exemption from audited financial statements on grounds other than no business activity.
• 8 weeks (consecutively or otherwise) or 15% of the compliance officer's time in a consecutive twelve month period: Threshold defining when a compliance officer is considered temporarily absent from office.
• longer than 5 days: Trigger point at which a licensee must appoint a competent individual to perform the duties of a temporarily absent compliance officer.