Segregated Portfolio Companies (BVI Business Company) Regulations, 2018 (SI 2018 No. 6)

Summary

These Regulations, made under the BVI Business Companies Act 2004, set out the detailed regime for BVI business companies that operate as segregated portfolio companies (SPCs). They cover how a company applies to become an SPC, how segregated portfolios are created, terminated and reinstated, financial statement and record-keeping duties, and the fees and administrative penalties that apply throughout the SPC's life.

• Formation: A person wishing to incorporate or register a BVI business company as an SPC must submit an approved-form application with details of directors, initial segregated portfolios and required incorporation documents; for an existing company, additional statements on assets, liabilities and solvency and a members' notice declaration are required.
• Permitted uses: Segregated portfolios may be used for holding assets for high net worth persons, operating multiple businesses, property development and management, and bankruptcy remote structured finance vehicles, in addition to purposes already allowed under the Act.
• Financial statements and records: An SPC must prepare financial statements having regard to section 148 of the Act and keep records under section 98, either per portfolio or on a consolidated but identifiable basis, unless the Commission grants an exemption.
• Creating, terminating and reinstating portfolios: Creation of a segregated portfolio must be notified to the Commission within 14 days; termination requires a written notification confirming no prejudicial effect on investors or creditors; reinstatement (by the company or by Court order on a creditor's application) triggers further notification duties.
• Notification of changes: An SPC must notify the Commission of any change to information previously submitted under the Regulations within 14 days of the change (with limited exceptions).
• Name control: The Commission may direct an SPC to change a misleading or undesirable segregated portfolio name, giving at least 21 days to comply.
• Fees and penalties: The Schedule sets fees for applications, approvals, notifications and annual maintenance, plus late payment penalties (a percentage of the notification fee per month late, or $200 per month for late annual fees) and administrative penalties for breach of notification duties.

Failure to meet the various notification deadlines exposes the SPC (and, in the case of portfolio creation, its directors) to administrative penalties imposed by the Commission under the Financial Services (Administrative Penalties) Regulations, separate from the late payment penalties in the fee Schedule.

Key obligations

• Submit an approved-form application to the Commission, with required director, portfolio and incorporation details, to incorporate or register a company as a BVI business company SPC
• For an existing company applying to become an SPC, submit memorandum/articles changes, an assets and liabilities statement, and director declarations of solvency and member notice
• Notify the Commission in writing within 14 days of creating a segregated portfolio
• Notify the Commission in writing within 14 days of the termination of a reinstated segregated portfolio
• Notify the Commission in writing within 14 days of reinstating a segregated portfolio and pay the requisite fee
• Where a Court orders reinstatement, provide the Commission a copy of the order within 7 days of the order
• Comply with a Commission notice to change a misleading or undesirable segregated portfolio name by the date specified, which must be at least 21 days after the notice
• Notify the Commission of any change in previously submitted information within 14 days of the change
• Prepare financial statements having regard to section 148 of the Act and maintain records under section 98 of the Act
• Pay the annual fee for the SPC and each existing segregated portfolio on or before the anniversary of incorporation or registration
• Pay prescribed fees for applications, approvals and notifications set out in the Schedule

Applies to

BVI business company segregated portfolio companies (SPCs), directors of segregated portfolio companies, creditors and other persons seeking reinstatement of a segregated portfolio

Deadlines

• within 14 days of the creation of the segregated portfolio: Notify the Commission in writing of the creation of a segregated portfolio
• within 14 days of the termination: Notify the Commission of the termination of a reinstated segregated portfolio
• within 14 days of the date of reinstatement: Notify the Commission in writing of the reinstatement of a segregated portfolio and pay the requisite fee
• within 7 days of the making of the order: Creditor or other person to provide the Commission a copy of a Court order reinstating a segregated portfolio
• not less than 21 days after the date of the notice: Deadline by which an SPC must comply with a Commission notice to change a segregated portfolio's name
• within 14 days of the date that the information changed: Notify the Commission of any change in information previously submitted under the Regulations
• on or before the anniversary of incorporation or registration: Pay the annual fee for the SPC and each existing segregated portfolio
• on or before 30 June / on or after 1 July: Different initial fee amounts apply depending on when a segregated portfolio is created during the year
• on the day the BVI Business Companies (Amendment) Act, 2018 is brought into force: Commencement date of these Regulations