Securities and Investment Business Act (Statutory Instruments) (Revised Edition 2020)

Summary

This is a Revised Edition (as at 1 January 2020) consolidating the subsidiary legislation made under the Securities and Investment Business Act. It brings together several distinct sets of regulations governing investment managers, mutual funds, private funds, incubator and approved funds, and recognised jurisdictions for fund functionaries, rather than a single freestanding regulation.

• Investment Business (Approved Managers) Regulations: Set out the application, approval, ongoing compliance, fee and annual return requirements for persons seeking to act as an approved investment manager to private, professional or closed-ended funds and similar structures.
• Investment Business (Registers) Regulations: Require the Commission to maintain registers relating to licensees and functionaries under the Act.
• Mutual Funds Regulations and Mutual Funds (Foreign Funds) Regulations: Govern recognition, registration and ongoing regulation of mutual funds, including foreign funds operating in or from the Virgin Islands.
• Private Investment Funds Regulations: Set requirements applicable to private investment funds.
• Public Funds Code: Establishes conduct and disclosure standards for public funds.
• Securities and Investment Business (Incubator and Approved Funds) Regulations: Provide a lighter-touch regime for incubator and approved funds, including information requirements, a public register, and transitional provisions for existing incubator/approved funds.
• Recognised Jurisdictions Notice: Lists jurisdictions (including the Cayman Islands, UK, US and others) whose fund functionaries the Commission may recognise and accept for purposes of the Act.

Together these instruments impose ongoing licensing, registration, disclosure, fee and reporting obligations on investment managers and funds operating under the Securities and Investment Business Act, with specific transitional deadlines applying to existing incubator and approved funds.

Key obligations

• An applicant for approval as an investment manager must submit its application to the Commission at least 7 days before the intended commencement of relevant business, unless a shorter period is accepted in writing
• A person relying on provisional commencement may only carry on relevant business for up to 30 days from submission of the application (extendable by up to a further 30 days at the Commission's discretion), and must cease business if approval is not granted within that period
• Approved investment managers must pay a renewal fee annually to maintain their approval and are liable to late payment penalties, with mandatory cessation of business if the maximum penalty and renewal fee remain unpaid within 30 days of becoming liable
• Approved investment managers must submit financial statements, maintain a compliance officer, and file annual returns as prescribed
• Approved investment managers must not carry on any business other than the relevant business permitted under regulation 9, subject to limited exceptions
• The Commission must maintain a public register of approved investment managers and a public register of incubator and approved funds, open to inspection
• Incubator and approved funds must provide further information to the Commission within the period and form the Commission determines when requested
• Provisions of the Mutual Funds (Amendment) Regulations 2019 take effect in relation to existing incubator or approved funds on 1 July 2020, and the maximum penalty amount under the Incubator and Approved Funds Regulations applies to existing funds from 1 April 2020

Applies to

investment managers, investment advisers, mutual funds, private funds, professional funds, closed-ended funds, public funds, incubator funds, approved funds, fund functionaries, licensees under the Securities and Investment Business Act

Deadlines

• at least 7 days prior to commencement of relevant business: Deadline for submitting an application for approval as an investment manager, unless the Commission accepts a shorter period
• up to 30 days from date of application submission: Period during which an applicant may provisionally carry on relevant business pending the Commission's decision, extendable by a further 30 days
• 30 days after becoming liable to the maximum penalty: Period within which an approved investment manager must pay the renewal fee and applicable maximum penalty before being required to cease functioning
• 1 April 2020: Effective date from which the maximum penalty amount under the Incubator and Approved Funds Regulations applies to existing incubator or approved funds
• 1 July 2020: Effective date for the Mutual Funds (Amendment) Regulations 2019 as applied to existing incubator or approved funds