FSC Act amended to provide for further regulatory powers and fee changes
The BVI Financial Services Commission (the FSC) has published new legislation amendments that came into force recently. It is essential to stay up-to-date with the latest changes and modifications, as these updates can have a significant impact on industries, businesses, and individuals alike. In this regard, the following paragraphs aim to provide an overview of the newly introduced amendment legislation.
Financial Services Commission (Amendment) Act, 2022
The Financial Services Commission (Amendment) Act, 2022 (Amendment Act) was gazetted on 29 December 2022 and came into force on 1 March 2023. The Amendment Act widens the scope of the FSC’s responsibilities to include: promoting financial stability in the BVI; developing the BVI into a competitive international financial service centre; issuing disqualification orders; and taking steps to prevent customer abuse by licensees and promoting customer protection practices.
In addition, the Amendment Act creates a Register of Directors and Senior Officers that sets out details of FSC-approved directors and senior officers. The Amendment Act also authorises the FSC to issue disqualification orders against licensees’ directors, general partners or limited partners, BVIBCs, and LPs. The FSC is also required to maintain a Register of Disqualified Persons and a Register of Restricted and Prohibited Persons.
Furthermore, the Amendment Act streamlines the relationship between the FSC and the Virgin Islands Deposit Insurance Corporation (VIDIC) in preparation for the future implementation of the Virgin Islands Deposit Insurance Act, 2016. It broadens the FSC's crisis management measures and resolution procedures and enables collaboration and information exchange between the FSC and the VIDIC. In addition, the Amendment Act requires banks to report financial distress, empowers the FSC to appoint a rehabilitator for licensees experiencing financial distress, and introduces conduct provisions that compel licensees to inform customers of any employee fraud and advise customers on remedial actions.
The Amendment Act improves the cooperation framework within the BVI by introducing measures for collaboration between the FSC and other domestic competent authorities, similar to the current collaboration regime with foreign competent authorities. Finally, the Amendment Act removed provisions regarding Authorised and Recognised Custodians, which were established to hold bearer shares in accordance with the jurisdiction's bearer shares immobilising regime, but are no longer required after the abolition of bearer shares under the BVI Business Companies Act.
Financial Services (Fees) (Amendment) Regulations, 2023
The FSC introduces the Financial Services (Fees) (Amendment) Regulations, 2023, gazetted on 25 January 2023 and scheduled to come into force on 1 April 2023. Of particular notice, these amendment regulations contain provisions (see Item No. (xi) of the Schedule) relating to the Virtual Assets Service Providers Act, 2022, which came into effect on 1 February 2023.
These Regulations entirely repeal and replace the Schedule to the Financial Services (Fees) Regulations. Registered agents and all applicants must ensure that proper fees are submitted following the Regulations update. The new Schedule of Fee Changes is outlined here.
BVI FSC’s press release on all the recent legislative updates can be found here.
Our blog post on the Banks and Trust Companies (Amendment) Act, 2022, which came into force on 1 March 2023, can be found here.
Our blog post on the BVI Virtual Assets Service Providers Act, 2022, which came into force on 1 February 2023, can be found here.