Segregated Portfolio Companies Regulations, 2005 (S.I. 2005 No. 96)

Summary

These Regulations, made under the BVI Business Companies Act 2004, set out the specific rules that apply when a segregated portfolio company (SPC) is also a mutual fund regulated under the Mutual Funds Act 1996. They cover approval of mutual fund SPCs, the functionaries such SPCs must have, audit requirements, and the process for creating and notifying new segregated portfolios. Part III adds general requirements on names, notification of changes, and fees applicable to all such companies.

• Approval to incorporate or register: An application to incorporate or register a company as a mutual fund SPC must include company name, administrator details, a list of initial segregated portfolios, and functionary details for each, plus supporting Mutual Funds Act documents and offering documents.
• Functionaries: A mutual fund SPC must at all times have one or more administrators, managers and custodians, and may appoint investment advisors; appointment instruments must specify which portfolio(s) the functionary serves and their duties.
• Audit: A mutual fund SPC must have an auditor and must file audited financial statements with the Commission within 6 months of its financial year end.
• Creating segregated portfolios: Public fund SPCs need prior written Commission approval to create a new segregated portfolio; private/professional fund SPCs need approval unless functionaries meet specified conditions (same as previously notified, or based in a recognised jurisdiction).
• Notification of new portfolios: Where prior approval is not required, the SPC must notify the Commission within 14 days of creating a segregated portfolio, including portfolio details, functionaries, and creation date, together with the offering document; failure is an offence carrying a $5,000 fine.
• Names: The Commission may direct an SPC to change a misleading or undesirable segregated portfolio name within a specified period (at least 21 days); non-compliance is an offence with a $5,000 fine.
• Notifying changes: An SPC must notify the Commission of any change to information previously submitted under these Regulations within 14 days of the change (with limited exceptions).
• Fees: Schedule 1 sets application fees, initial fees (varying by whether incorporation/registration occurs before or after 30 June), annual fees payable by 31 March each year, and late payment penalties of $250 per month or part thereof outstanding; total initial and annual fees are each capped at $10,000 per year.

The Regulations therefore create ongoing compliance obligations for mutual fund SPCs around approvals, audits, timely notifications, and annual fee payments, backed by statutory offences and penalties for certain failures.

Key obligations

• A mutual fund SPC must file audited financial statements with the Commission within 6 months of the end of its financial year
• A mutual fund SPC must at all times have one or more administrators, managers and custodians appointed
• A public fund mutual fund SPC must obtain prior written Commission approval before creating a segregated portfolio
• A professional or private fund mutual fund SPC must obtain prior written Commission approval before creating a segregated portfolio unless functionary conditions are met
• Where prior approval is not required, the SPC must submit notice of creation of a segregated portfolio to the Commission within 14 days of creation, including required details and the offering document
• A segregated portfolio company must notify the Commission of any change in previously submitted required information within 14 days of the change
• A segregated portfolio company must comply with a Commission notice to change a misleading or undesirable portfolio name by the date specified (not less than 21 days after the notice)
• A mutual fund SPC must pay its annual fee on or before 31 March each year, or incur a late payment penalty of $250 per month or part thereof outstanding
• A mutual fund SPC must pay application and initial fees as set out in Schedule 1 upon incorporation, registration, or approval to create segregated portfolios

Applies to

segregated portfolio companies, mutual fund SPCs, mutual funds (professional, private and public funds under the Mutual Funds Act 1996), functionaries (administrators, managers, investment advisors, custodians)

Deadlines

• within 6 months of the end of its financial year: Mutual fund SPC must file audited financial statements with the Commission
• within 14 days of the creation of a segregated portfolio: Notice of creation of segregated portfolio must be submitted to the Commission (where prior approval was not required)
• within 14 days of the date that the information changed: Notification to the Commission of any change in previously submitted required information
• not less than 21 days after the date of the notice: Deadline by which a segregated portfolio company must comply with a Commission direction to change a misleading or undesirable portfolio name
• on or before 31st March of each year: Annual fee payment deadline for mutual fund SPCs
• on or before 30th June in any year: Threshold date determining lower initial incorporation/registration fees
• on or after 1st July in any year: Threshold date determining higher initial incorporation/registration fees