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BVI legislation may cause an exodus of IFA firms

Legislation has been introduced in the BVI which could force many international IFA firms to move.

BVI legislation may cause an exodus of IFA firms

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The Securities and Investment Business Act 2010 (SIBA) was introduced in May this year but brought into force in November. It requires investment firms domiciled in the BVI to obtain a licence from the regulator, the Financial Services Commission (FSC), even if the company’s investment activity is conducted outside of the BVI.

The Act states that “any company incorporated in the BVI is deemed to carry on investment business in the BVI for the purposes of SIBA even if it carries on all its business activities outside of the BVI”. It adds that as such “any BVI business which carries on “investment business”…must obtain a licence”.

Andrew Jackson, managing director of Capital Growth Solutions, which has a registered company in the BVI, said he is currently taking legal advice on the effects of the Act on his business.

“I will wait and see what my legal advisers say but there is the possibility I may need to relocate to the Isle of Man or somewhere,” said Jackson. “It could be a bit of a hassle but it is just the nature of the business. I will wait to get the legal advice back as it may not be too onerous to get the licence in the BVI either.”

To monitor the implementation of the Act, the FSC formed the Securities, Investment Business and Mutual Funds Advisory Committee on 17 December 2010. The new committee, which replaces the Mutual Fund Advisory Committee, is tasked with reviewing the SIBA and any related legislation governing securities and investment business in the BVI.

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