A month ago the BVI Financial Services Commission issued Draft Regulatory Code 2008 - a consultative document under the Financial Services Commission Act, 2001. The document was published by the BVI FSC on October 10.
The Financial Services Commission Act , 2001, and the Regulatory legislation for which the Commission bears responsibility, together establish a general legal framework for the regulation and supervision by the Commission of financial services industry in BVI. Regulation and supervision of financial services is quite complex, and from the practical point of view it is not worth to include the details in the primary legislation, which should not be changed frequently.
With the purpose to keep the regulatory framework in balance with changing international standards in the financial services area, the FSC Act, 2001 enabled the Commission, as BVI financial services regulator, to issue Regulatory Code. This document contains more detailed requirements that support and sometimes supplement basic framework established by the primary legislation.
Part 1 of the Draft Code contains certain fundamental principles of business that apply to all licensees. The requirements of general application that apply to every licensee, regardless of the type of licence held, are set out in Part 2. Following parts of the draft Regulatory Code include additional requirements on specific types or categories of licensees: Part 3 includes banking requirements, Part 4 contains insurance requirements; Part 5 contains requirements applicable to trust companies and company managers; Part 6 - requirements applicable to persons licensed under the Securities and Investment Business Act, 2008, except for mutual funds. Requirements applicable to mutual funds are given in Part 7.
Being a subsidiary legislation, the Regulatory Code has the status of “law”, meaning it has the same legal force as if it had been contained in the basic financial services legislation of the BVI.
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