Sunday, June 28, 2009

The Commission Issues Consultation Draft on Mutual Funds

On June 16, the British Virgin Islands Financial Services Commission has published Mutual Funds Regulations, 2009. This consultation draft document issued under the Securities and Investment Business Act, 2009, concerns private and professional funds, public funds, and their administration.

In the first part of the document, related to private and professional funds, the obligations on them are stated by the Commission, including directors, functionaries of private and professional fund, and investment warning; also, regulations and notifications on preparation and audit of financial statements for private and professional funds.

The second part of the document contains application for registration of public funds, content of prospectus of public fund,and other requirements for this type of mutual funds. The last part of the document is devoted to administration of the funds, and includes requirements for the registers. Schedule in the end of the document concerns information to be contained in Prospectus of a Public Fund in respect of the Manager, the Administrator, the Custodian, the Investment Adviser, the Director and other relevant persons of the fund.

Other points of the Schedule are the Constitution and Objectives of the fund, the Characteristics of Fund Interests in the fund, Valuation of fund property and fund interests, fees, distribution of income, issue and redemption of fund interests, some general and additional information.

Tuesday, June 16, 2009

BVI Financial Services Statistics for Q4 2008

In the end of May 2009, the Commission issued the thirteenth volume of Quarterly Statistical Bulletin, describing the situation in the financial services industry of the British Virgin Islands in the fourth quarter of 2008 and covering changes and progress in its different sectors.

The Registry of Corporate Affairs provided following statistical data for this period:
9,000 new companies were incorporated in the fourth quarter of 2008 – a decrease compared to 16,133 in Quarter 3 2008, and 17,513 in the fourth quarter of 2007. Cumulative amount of companies by the end of December 2008 was 414,620. In the reported period, 30 new Limited Partnerships were established – that is more than in Quarter 3 2008. Cumulative number of Limited Partnerships made 558.

If we have a look at the chart of company incorporations in the years 2005-2008, where statistical data are divided by quarters of the year, we can see that the most effective year by number of new incorporations was 2007, while this year was not so effective. This decline is certainly connected with global tendencies and the impact of financial crisis on the financial services industry of the British Virgin Islands.

Concerning the Banking & Fiduciary Services, 1 class I Trust licence was issued, bringing the cumulative number of this category of trust licences to 98 by the end of 2008. The Banking sector reported total assets of $2,363,702,000, total investments of $4,681. By commercial banks statistics, liquid assets made 46.48% of total deposits, return on assets made 2.16%, and average risk asset ratio was 27.82%.

Also, in the fourth quarter of 2008 11 new licenses were issued to investment managers and administrators, bringing the total number of licenses to 581.The number of professional mutual fund entities registered has grown to 1,894, compared to the same period of 2007. There were 831 private mutual funds and 228 public funds newly registered in the BVI.

The Insurance statistics showed that there were 11 new captive insurers licenses issued (4 in Q3 2008), 308 renewed and 68 cancelled. The reported insurance post licensing transactions: 6 directors appointments, 6 cases of shareholding change, 5 mergers and 5 liquidations. Also, 5 captive insurers and 1 domestic insurer received approvals for licensing.

In the sphere of Legal and International Co-operation, it was stated that just 12 co-operation matters were started – compared to 26 in the previous quarter; there were 12 onsite inspections held on trust companies and 4 inspections of investment businesses.

Friday, June 12, 2009

BVI premier going to France to sign tax agreement

On June 9, the Premier of the British Virgin Islands Ralph O'Neal reported during press conference about his plans to make visit to France, in order to sign Tax Information Exchange Agreement with French government. After the agreement with France will be signed, the number of TIEAs signed by the Territory will be already 11. So, the British Virgin Islands will come closer to the recommendations stated in the report issued by the Organisation for Economic Cooperation and Development and concerning tax transparency, and the new international tax standard of 12 tax treaties signed by each jurisdiction, established during the G-20 summit in April.

Ralph O'Neal stated in his comments that, after negotiations with France are complete and the TIEA signed, the BVI will continue to pursue similar agreements with other OECD countries in order to fully comply with the new standards, and be moved from the “grey” to the “white” list of jurisdictions. Some weeks ago, BVI Government signed tax treaties with the group of Nordic countries.

During the same press conference Premier was asked by media on the effects of the global financial crisis of the financial sector of the territory. He answered that the BVI Government is still “keeping a close eye on the Financial Sector”, but he did not say how many companies have been removed from the BVI IBC Register. He explained that the number of companies to be liquidated seems not to increase, but added that liquidation statistics solely cannot give information on how many companies in the industry have been affected.

Monday, June 08, 2009

BVI Business Companies Order Published by the Commission

On May 26, 2009 the Registry of Corporate Affairs of the British Virgin Islands issued BVI Business Companies Order, which is an amendment of Schedule 2 of the BVI Business Companies Act, 2004. The Order, which will be cited as the BVI Business Companies (Amendment of Schedule 2) Order, 2009, was made by the Cabinet on the advice of the Financial Services Commission.

The document adds some sub-paragraphs to the Part III of Schedule 2 of the Act, that comprise the following issues:

- Where a CapCo that is automatically re-registered was liable to file an annual return prior to this procedure, the requirement for such filing shall continue to apply for the period up to 31st December 2008, and any fee for the filing of the annual return shall not be applied or required by the Registrar.

- The annual return required to be filed for the year 2008 shall be filed by the new registered agent of the CapCo that is automatically re-registered, and all obligations relating to the filing of the annual return shall apply anyway.

- Registered agent will mean the person that is named so in the memorandum of the re-registered CapCo, or appointed by a resolution of directors or members of CapCo.

Part VI of Schedule 2 is amended in paragraph 40 by inserting some formulations, and paragraph 46 by replacing “two months” term by “six months” term, and by adding the new sub-paragraphs informing that, in case the company 'to which this Division applies' fails to comply with the requirements of sub-paragraph (2) within the specified period, the Registrar may strike it off the register. Also, this striking off of a company by the Registrar “shall be treated as if the failure by the company to appoint a registered agent or file a notice of appointment of a registered agent were in accordance with section 213 (1) (a).”.

The document was made by the Cabinet on 24th April, 2009, and signed by Cabinet Secretary Otto O'Neal.

Thursday, June 04, 2009

OECS Heads Talk on the Results of the Meeting

OECS Heads of Government have summarized the results of the 49th OECS Meeting in BVI, which was named a watershed in the historical evolution of the organisation. The leaders of the countries of the organization stated its enhanced international profile: in recent times, new relationships have been or are formed, including that at the regional level with Brazil, Venezuela, Austria, Turkey, Spain, Mexico, Cuba, France, the US Virgin Islands, the EU organisation, Puerto Rico and Trinidad and Tobago.

During the meeting, the Governor of the US Virgin Islands was engaged in discussions on closer functional co-operation with other countries of the organisation. The Heads of Governments have mandated the OECS Secretariat to work along with the USVI Administration to complete a Memorandum of Understanding in order to facilitate the closer ties.

OECS Heads of Government confirmed their commitment to the ongoing process of deepening the regional integration movement, and stated that the inauguration of the OECS Economic Union will take place on June 18 2010. The Economic Union public education campaign, which has already been started in several countries, will give OECS nationals an opportunity to comment on and make inputs into a draft OECS Economic Union Treaty. The amended draft Treaty will go before national parliaments in Member States for ratification.

Monday, June 01, 2009

Results of OECS Meeting Held in BVI

After the 49th meeting held in Tortola, BVI, on May 20-22, the Organisation of Eastern Caribbean States (OECS) issued a release concerning the matters discussed, and decisions taken during the meeting.

One of the decisions taken was that the former chairman, Tillman Thomas, the Prime Minister of Grenada, was replaced in his post by Montserrat Chief Minister, Dr Lowell Lewis. The new OECD chairman spoke on the importance of regional collaboration to tackle the global financial crisis, and confirmed the commitment of Montserrat to deepen the integration process as an Overseas Dependent Territory.

During the meeting, the Declaration of Intent was signed by Spain's Ambassador to the Caribbean, Jesus Silva, with the OECS which includes exchange of information and training.

The leaders of the territories of the region talked on the future of the financial services, and discussed that it was necessary to have legislation for greater transparency. Other issues discussed include tourism, social safety, functional co-operation, economic development and the Eastern Caribbean Supreme Court (ECSC). In his speech on the opening of the conference, BVI Premier Ralph O'Neal said that the territory was pleased to accomodate the Commercial Division of the Court.