After much anticipation, the final draft of the Investment Business (Approved Managers) Regulations, 2012 (the Approved Managers Regulations) was Gazetted in the BVI on 1 November 2012.
We are still waiting for the publication of the guidelines which accompany the Approved Managers Regulations (the Guidelines); details of the regulatory fees which will apply under the new regime; and the date when the new regime takes effect and as soon as these are published, we will be issuing a detailed briefing about the new regulatory regime. At this stage, our expectation is that the new regulatory regime will come into force at some point in the next couple of months and possibly before the end of 2012.
The Approved Managers Regulations are intended to appeal to non-institutional investments managers and investment advisors utilising the BVI to domicile their investment management and investment advisory vehicles and will provide an alternative regulatory regime for those managers and advisors who are currently required to be licensed under Part I of the Securities and Investment Business Act, 2010 (SIBA). As such, eligible managers and advisors will be able to elect to be licensed under either regime.
To be eligible, a manager or advisor must be or must be intending to be acting as a manager or advisor to either:
- one or more private or professional funds recognised under SIBA;
- one or more BVI domiciled closed-ended funds which have equivalent characteristics to a private or professional fund); or
- one or more foreign funds investing substantially all of their assets in a BVI domiciled fund,
with aggregate assets under management (or in the case of a close-ended funds, aggregate capital commitments) below a stipulated threshold.
For managers and advisors to open-ended funds, the aggregate assets under management have been set as a maximum of US$400 million. For managers and advisors to closed-ended funds, the threshold for aggregate capital commitments will be set in the Guidelines which are still to be published.
The principal advantage for an eligible manager or advisor electing to be regulated under the Approved Managers Regulations rather than SIBA will be that the ongoing obligations will be less onerous than the ongoing obligations which apply under SIBA. In addition, eligible managers and advisors electing to take advantage of the new regulatory regime will benefit from a quicker time to market, as they will be able to commence business seven days after filing their license application with the Financial Services Commission to be licensed as an Approved Manager.
Importantly, eligibility to apply to be licensed as an Approved Manager will be no bar for a manager or advisor either applying for a license, or if already licensed continuing to be licensed, under SIBA. Similarly, existing managers and advisors holding a license under SIBA, but eligible to be an Approved Manager will be able to apply to alternatively become licensed under the Approved Managers Regulations (and so surrender their existing SIBA license).