Prepare and file annual financial statements to the Commission (with no requirement for an independent audit)įile bi-annual returns with the Commission Notify the Commission of any change to any of the information submitted to the Commission in its application for instance, in relation to it or its conduct (which has or is likely to have a material impact or Significant regulatory impact), directors, etc. Have a minimum of two directors at all times, one of whom must be an individual Pay an annual fee of US$1,000 on or before 31 March of each year Otherwise, an Incubator Fund and Approved Fund are required by the Regulations to: There is no requirement for the issuance of an offering document and where the fund determines not to issue one, the required investor warnings can be set forth in a separate term sheet. However, there are no mandatory custody requirements. Each fund is required to appoint an authorized representative in the BVI, and an Approved Fund is required to have an administrator at all times. In keeping with the cost-efficient approach to these vehicles, service provider requirements are minimal. Ongoing Obligations | BVI Incubator Funds The Regulations enable Incubator and Approved Funds to be set up and launched on a fast track, cost-effective basis with minimal regulatory oversight by the BVI Financial Services Commission. This restriction often caused a manager difficulty in fundraising as even friends and relatives would generally prefer a mechanism to enable them to withdraw their funds on demand if needed or to allow them to vote with their feet if the investment strategy was not going to plan. These funds have satisfied a recognised need in the market for a lightly regulated investment vehicle that can easily grow along with the first time or start-up manager as their business and assets under management grow.įor many years, a type of closed-end structure was used to fill this void, and while those structures may still have their place, the drawback was that they were closed – not in the sense of a limited offering of shares but rather an investor’s right to redeem was restricted. Approved Funds being marginally more popular than Incubator Funds. As we thought at the time, these have quickly become popular vehicles in short order for startups and new managers, with more than 50 new funds being established in a short period.
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