Friday, November 03, 2006

New Private Trust Company Legislation to be introduced in the British Virgin Islands

The BVI Financial Services Commission has reported about its plans to implement new legislation on private trust companies in the British Virgin Islands. The announcement was made on 31 October 2006 by Managing Director and Chief Executive Officer of the BVI FSC Robert Mathavious. He also said that the proposed legislation will appear on the statute books in or around January 2007.

Mr. Mathavious explained the way how the legislation is expected to be introduced, by amending the Financial Services Commission Act and issuing a new Regulatory Code under the Act, which will enable some types of companies to apply for exemptions from licensing and other provisions and requirements of the BVI's Banks and Trust Companies Act.

By the new legislation, private trust companies which do not offer their services to the general public will be able to apply for the new exemption from the provisions of the Banks and Trust Companies Act. It is expected that unremunerated BVI companies which hold assets as nominees or “bare trustees”, not offering their services to the general public, will be automatically exempted from the Act requirements. It is also anticipated that these exemptions will have retroactive effect.

The announcement on the new legislation was welcomed by the Chairman of the BVI Branch of the Society of Trust and Estate Practitioners (STEP), Hélène Lewis. In her comments she said that the introduction of these measures will make the BVI a highly attractive jurisdiction to use for the incorporation of private trust companies. Christopher Mckenzie, Deputy Chairman of STEP-BVI, also approved the announcement, having added that the element of certainty that will be created by these new measures should find a great deal of favour amongst those who are seeking a reputable jurisdiction in which to set up these sorts of structures.

Lisa Penn-Lettsome, the President of the BVI Bar Association, commented that the proposed new legislation would enhance the reputation of the BVI as a jurisdiction with both robust and proportionate regulations for BVI service providers, and with the flexibility which enables clients to set up structures to meet their legitimate estate planning needs. She also added that the possibility for the companies domiciled in the BVI to act as trustees is integral to the provision of a comprehensive range of financial services by an offshore financial centre.

The BVI Government is working in close collaboration with the Financial Services Commission and the private sector. They have adopted such a policy to make sure that the Territory maintains its reputation as a modern, progressive and well-regulated jurisdiction in which to do business.

Private trust companies have got popularity in Offshore Financial Centres in recent times. The proposed new legislation will be the latest of a series of financial services-related statutes which have been enacted by the BVI Government over the past few years and which include the Virgin Islands Special Trusts Act (“VISTA”), the Trustee (Amendment) Act, the BVI Business Companies Act, the Insolvency Act and some other statutes dealing with regulatory issues.

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