The long awaited Securities and Investment Business Act, 2010 ("SIBA") is to be introduced shortly. Although passed by the BVI House of Assembly during the week commencing 12 April, SIBA is not yet in force. In summary, SIBA provides for:
- Repeal of the Mutual Funds Act, 1996 and replacement with Part III of SIBAalong with secondary legislation.
- A new investment business licensing regime to regulate investment advisors, broker-dealers, market makers, custodians and operators of investment exchanges.
- Restrictions on, and regulation of, public securities in a non-mutual funds context.
- Introduction of a market abuse regime which provides for offences of insider trading, circulating misleading infromation and market manipulation.
SIBA and related secondary legislation is intended to update investment business regulation and, in particular, bring the BVI into line with international best practice and to fulfil obligations arising as a result of the BVI's membership of the International Organization of Securities Commissions (IOSCO).
While overall SIBA represents a significant development, the changes to the mutual funds regime are likely to have less of an impact. Many of the changes simply codify what has been a matter of practice for funds and the regulator (the Financial Services Commission) for a number of years. Further, existing funds will benefit from transitional provisions which mean that certain provisions of SIBA will not apply for a period following the commencement date.
For more on SIBA we invite you to refer to:
Our Regulatory Group's general overview of SIBA.
Our Investment Funds Department's guide to the impact SIBA will have on mutual funds.