14/04/2010 Author: Gwyn Roberts

BVI to pass new law on fund registration

The British Virgin Islands’ (BVI) new Securities and Investment Business Act is expected to become law this week, heralding a number of changes for the region’s hedge funds.

Although the bulk of the legislation, seeking to license investment advisors, will not impact funds or administrators, which are already registered with the BVI Financial Services Commission (BVIFSC), the Act’s repeal of the Mutual Funds Act 1996 will have some minor effects on the industry, according to local experts.

“The bulk of these changes will codify practices that are already pretty standard,” said Richard May, a lawyer at Walkers' BVI office.

With the new legislation ensuring a minimum board presence of two directors, funds will also have to file offering documents with regulators, as well as informing the BVIFSC of changes in service providers. Most crucially, funds will also have to file results of an annual audit.

Professional funds, the most common hedge fund structure in the BVI, will now have a minimum investment threshold of $100,000 for the majority of investors, excluding only those connected to the fund.