Friday, July 02, 2010

BVI FSC Issued Public Fund Code

On 10 June, 2010 the British Virgin Islands Financial Services Commission published the consultation draft of Public Funds Code, 2010, which is issued under section 63 (1) of the Securities and Investment Business Act, 2010 (SIBA) and has the status of delegated or subsidiary legislation. The proposed document is open for comments of the industry practitioners, especially from the private sector, until 30 June.

The draft Public Funds Code provides for the establishment and operation of public funds and for matters permitted by the Mutual Funds Regulations to be contained in the Public Fund Code.

The Public Fund Code establishes high level principles to be followed by public funds: integrity, management and control, investors' interests, relationship with Commission. Its regulations cover the operation of public funds, including corporate governance, policies and procedures, segregation and safekeeping of fund property, valuation and pricing. The requirements in the Code relating to valuation and pricing are designed to implement the requirements of Principle 20 of the IOSCO Objectives and Principles. By this principle, the regulator framework should ensure that there is a proper and disclosed basis for asset valuation, the pricing and the redemption of units in a public fund. The Code also sets out the requirements concerning public fund's records in the British Virgin Islands; establishes fund's relationship with, and reporting to, the Commission.

The Code contains Schedules that provide for what kind of information should be contained in prospectus of a public fund, and state the events and changes that are to be notified to Commission.

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