Segregated Portfolio Companies (Mutual Funds) Regulations (Revised 2020)

Summary

These Regulations govern segregated portfolio companies (SPCs) that operate as mutual funds under the BVI Securities and Investment Business Act. They set out the approval process for incorporating or registering a mutual fund SPC, rules for creating, notifying, terminating and reinstating segregated portfolios, functionary and audit requirements, and the fees payable to the Commission.

• Incorporation/registration: A person wishing to incorporate or register a mutual fund SPC must apply to the Commission in the approved form, providing details of the company, its administrator, initial segregated portfolios and functionaries, together with the relevant fund application under the Act or the Incubator and Approved Funds Regulations.
• Functionaries: A mutual fund SPC must at all times have one or more administrators, managers and custodians (investment advisors optional), unless exempted by the Commission, though an administrator can never be exempted.
• Audit/financial statements: Private, professional or public mutual fund SPCs must have an auditor; incubator or approved funds must prepare and submit financial statements as required by the relevant regulations, subject to possible Commission exemption.
• Creating segregated portfolios: Most mutual fund SPCs need prior written Commission approval to create a new segregated portfolio, with limited exceptions for private/professional funds meeting functionary continuity conditions.
• Notification duties: Companies must notify the Commission of the creation of a segregated portfolio within 14 days, of termination effects, and within 7 days of reinstatement of a segregated portfolio or termination of a reinstated one, paying any requisite fee.
• Fees: The Schedule prescribes application, initial, annual and late-payment fees, including an annual fee due on or before 31 March each year, capped at US$10,000 per year, with monthly late-payment penalties for missed notifications or fee payments.

The Regulations also preserve pending applications and existing SPCs approved under the prior (now revoked) Segregated Portfolio Companies Regulations, ensuring continuity of status and process.

Key obligations

• Submit an application in the approved form to the Commission before incorporating or registering a company as a mutual fund SPC, including required information and accompanying fund application documents
• Maintain at all times an administrator, manager and custodian for the mutual fund SPC (administrator cannot be exempted)
• Have an auditor audit financial statements (for private, professional or public funds) or prepare and submit financial statements per applicable regulations (for incubator or approved funds)
• Obtain prior written Commission approval before creating a segregated portfolio, unless falling within the limited exception for initial portfolios or qualifying private/professional fund functionary continuity
• Notify the Commission within 14 days of the creation of a segregated portfolio, in the approved form, including required details and a copy of the offering document or investment warning
• Submit written notification to the Commission before terminating a segregated portfolio, confirming solvency, absence of prejudice to investors/creditors and treatment of outstanding liabilities; termination cannot take effect earlier than 7 days after the Commission receives the notice unless a shorter period is permitted
• Notify the Commission within 7 days of the termination of a reinstated segregated portfolio
• Notify the Commission within 7 days of reinstating a segregated portfolio and pay the requisite fee
• Pay the prescribed annual fee to the Commission on or before 31 March each year, commencing the year after incorporation or registration
• Notify the Commission of changes in information previously submitted to it

Applies to

segregated portfolio companies that are mutual funds (mutual fund SPCs), private or professional funds, public funds, incubator funds, approved funds, administrators, managers, custodians, investment advisors, auditors

Deadlines

• within 14 days of the creation of a segregated portfolio: Mutual fund SPC must submit notice of creation of the segregated portfolio to the Commission
• not earlier than 7 days after the Commission receives notification of termination: Earliest date on which termination of a segregated portfolio may take effect
• within 7 days of the termination: Notify the Commission of the termination of a reinstated segregated portfolio
• within 7 days of the date of reinstatement: Notify the Commission in writing of the reinstatement of a segregated portfolio and pay the requisite fee
• on or before 31 March of each year: Annual fee payment due to the Commission by a mutual fund SPC
• 3 August 2018: Commencement date of the Regulations