Mutual Funds Regulations (Revised 2020)

Summary

These Regulations, made under the BVI Securities and Investment Business Act, set out the detailed operating requirements for private funds, professional funds and public funds recognised or registered in the Virgin Islands. They cover fund administration, governance, valuation, financial reporting, notification duties and public fund registration and prospectus content.

• Recognition and registration: Prescribes the information and documents that must accompany applications for recognition as a private or professional fund, or registration as a public fund, including constitutional documents, offering documents or prospectus, and valuation policy.
• Governance: Private and professional funds must have at least two directors (at least one an individual) and, subject to limited exemptions, a fund manager, fund administrator and custodian at all times.
• Functionary changes: At least 7 days prior notice must be given before appointing a new functionary, and written notice with reasons must be given within 7 days of a functionary ceasing to act.
• Investment warnings: Private and professional funds must provide investors with a prescribed investment warning, either in the offering document or as a separate document.
• Valuation of fund property: Private and professional funds must maintain and implement a written valuation policy, value fund property at least annually, and manage conflicts of interest where the investment and valuation functions are not independent.
• Financial statements and audit: Funds must prepare financial statements to specified accounting standards, appoint an auditor (subject to exemption), and file audited financial statements with the Commission within 6 months of financial year end, extendable up to a maximum of 15 months.
• Ongoing notifications: Funds must notify the Commission of specified events such as director, auditor or authorised representative appointments and departures, changes of business address, amendments to constitutional documents, offering documents or valuation policy, generally within 14 days.
• Public funds: Public funds face additional registration, director, trustee, functionary, accounting/audit standard and prospectus content requirements, including compliance with the Public Funds Code.
• Registers: The Commission maintains public registers of recognised and registered funds containing prescribed particulars, open to public inspection.

Transitional provisions phase in certain requirements for funds that existed before the relevant commencement or amendment dates, including a first transition date of 31 December 2010 and a 1 July 2020 effective date for changes made by the Mutual Funds (Amendment) Regulations, 2019.

Key obligations

• Private and professional funds must have at least 2 directors, at least one an individual, and must notify the Commission immediately in writing if this requirement is breached
• Private and professional funds must at all times have a fund manager, fund administrator and custodian, unless exempted by the Commission on written application
• No person may be appointed as a functionary of a private or professional fund unless at least 7 days prior notification has been given to the Commission
• A private or professional fund must give written notice to the Commission within 7 days of a functionary resigning, being terminated, or otherwise ceasing to act, including the reason for ceasing to act
• No offer or invitation to invest in a private or professional fund may be made unless the investor is provided with a compliant investment warning
• Private and professional funds must maintain a valuation policy for fund property, ensure it is implemented, and have fund property valued at least annually
• Private and professional funds must prepare financial statements to a prescribed accounting standard and appoint an auditor, unless exempted by the Commission
• Private and professional funds must provide audited financial statements to the Commission within 6 months after financial year end, or within an extended period approved by the Commission not exceeding 15 months
• Private and professional funds must notify the Commission within 14 days of specified events such as appointment or departure of a director, authorised representative or auditor, change of business address, amendment of constitutional documents, offering document or valuation policy
• Public funds must register with the Commission and their prospectus must comply with the Act, the Regulations and the Public Funds Code
• Public funds must have a trustee if constituted as a unit trust and must meet prescribed director, functionary and accounting/audit standard requirements

Applies to

private funds, professional funds, public funds, fund managers, fund administrators, custodians, auditors, directors, authorised representatives, functionaries of mutual funds

Deadlines

• 7 days prior to appointment: Notice to the Commission required before appointing a functionary of a private or professional fund, unless a shorter period is accepted
• within 7 days: Written notice to the Commission after a functionary of a private or professional fund resigns, is terminated, or otherwise ceases to act
• within 14 days: Notification to the Commission of specified events such as director/auditor/authorised representative appointment or departure, change of business address, or amendment to constitutional documents, offering document or valuation policy
• within 6 months after financial year end: Private and professional funds must provide audited financial statements to the Commission (extendable up to a maximum of 15 months, or 9 months without exceptional circumstances)
• 31 December 2010 (first transition date): Date by which certain governance, functionary and audit provisions took effect for existing private, professional and public funds
• 1 July 2020: Effective date of the Mutual Funds (Amendment) Regulations, 2019 provisions in relation to a transitioning mutual fund