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The New BVI Private Investment Funds Regime

The British Virgin Islands (BVI) has introduced a new regulatory regime for the recognition of private investment funds. Under the new regime, closed-ended funds, including private equity and venture capital funds, which were previously not regulated in the BVI, will have to be recognised by the Financial Services Commission (FSC) as private investment funds prior to carrying on business, subject to a transition period for existing funds (see below).

Background


Closed-ended funds were historically not regulated in the BVI as they fell outside the definition of “fund” for the purposes of the BVI Securities and Investment Business Act, 2010 (“SIBA”). However, by an amendment to SIBA pursuant to the Securities and Investment Business (Amendment) Act, 2019 (the “Amending Act”), such funds will now be required to apply to the FSC for recognition as private investment funds. The Amending Act and accompanying Private Investment Funds Regulations, 2019 (the “Regulations”) were introduced in order to bring the BVI into conformity with European Union requirements to regulate closed-ended investment funds.

Definition of Private Investment Fund


A private investment fund is defined to include a company, partnership or unit trust which collects and pools investor funds for the purposes of collective investment and diversification of portfolio risk, and which issues fund interests that entitle the holder to receive an amount computed by reference to the value of a proportionate interest in the net assets of the fund. Most closed-ended and private equity funds will be considered private investment funds under the new regime.

 

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The New BVI Private Investment Funds Regime

 


Robert J.D. Briant
Partner, Head of BVI Corporate

British Virgin Islands   +1 284 852 1100


Anton Goldstein
Partner

British Virgin Islands   +1 284 852 1119


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