In line with initiatives in other international financial centres, as well as in the European Union under the Alternative Investment Fund Managers Directive, the BVI moved at the end of 2019 to introduce a recognition regime for closed-ended funds, known locally as “Private Investment Funds” (PIFs).
Unlike the approach taken elsewhere however, PIFs in the BVI are subject to a light-touch regulatory regime essentially comprising of a registration process which results in a PIF being “recognised” by the BVI Financial Services Commission (BVI FSC).
The new regime came into force on 31 December 2019 and a 6-month transitional period applies to currently active/legacy PIFs. The transitional period is extendable in certain circumstances.
As would be expected, the changes have necessitated a number of amendments to sections of the BVI’s investment funds regime, in particular under the Securities and Investment Business Act 2010. A copy of our detailed and informative client update on the amendments can be found here.
New PIF Guidelines
As a further development to our update, the BVI FSC issued the Private Investment Funds Regime Guidelines on 31 December 2019 (the PIF Guidelines). A copy of which can be found here.
The PIF Guidelines were issued in accordance with the Financial Services Commission Act 2001 and provide an overview of the PIF regime describing the requirements for recognition as a PIF as well as the ongoing obligations to which entities recognised as PIFs must adhere. The PIF Guidelines sets out the application form to be used in the recognition along with the applicable fees.
The introduction of PIFs in the BVI reinforces the jurisdiction’s reputation of being at the forefront of global regulatory initiatives and benchmarking.