BVI Incubator Fund License
The statutory legislation governing most funds in the BVI is the Securities and Investment Business Regulations 2015 (“SIBA”) and the Mutual Fund Regulations, 2010.
About BVI Incubator Fund License
The incubator fund is designed for managers who are looking to start an investment strategy on a trial basis with sophisticated investors. If the strategy succeeds within the prescribed timescale, the Regulations provide a seamless route for the fund to be recognised or approved as a private professional or approved fund, depending on the manager’s future plans for growth of the fund. If the strategy does not succeed, the regime allows for an incubator fund to close down or convert to an ordinary company. The key differentiating criteria for incubator funds over other fund types include:
- Only suitable for “sophisticated private investors”. Such investors are defined in the Regulations as “a person who has been invited to invest in an incubator fund and the amount of his or her initial investment is not less than US$20,000.”
- The total number of investors is limited to 20.
- Net assets of the fund must not exceed US$20,000,000 or its equivalent in any other currency.
- No manager, administrator or custodian is required to be appointed.
- No audit required.
- Can only be approved for a two year period. It is possible to seek an extension from the Commission for an additional 12 month period. Prior to the end of this period it will be necessary to make an application to the Commission for the fund to be recognised as either a private fund or a professional fund or to be approved as an approved fund.
BVI funds, recognized or registered under SIBA, are generally required to appoint functionaries who must either meet the FSC’s ‘fit and proper’ criteria, or must be located in one of the BVI’s recognized jurisdictions. Functionaries from a non-recognized jurisdiction may also be appointed, provided that they will satisfy the FSC that their jurisdiction has an effective regulation on investment businesses in place. The below functionaries need to be appointed for an Incubator fund.
- Submit semi-annual returns to the FSC by 31st January and 31 July which summarizes pertinent information regarding the fund’s status, including the number of investors, total investments, aggregate subscriptions and redemptions, NAV and details of any significant investor complaints and how such complaints were dealt with. Each return will contain a confirmatory declaration which the directors will need to make confirming that the fund is not in breach of the New Fund Regulations.
- Notify the FSC within 14 days of any changes to the information provided in the application for approval or in relation to any matter which is likely to have a material impact on the fund.
About Valsen Fiduciaries
Valsen Fiduciaries is a licensed independent global service provider of a broad range of fiduciary, administrative, legal, corporate secretarial and support services.
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The Valsen Advantage
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- We are very hands on in the post filing period checking with re regulator and service providers and updating you regularly. Any queries raised by the regulators and service providers during processing will be quickly synthesized by us and we shall craft the right responses to move the process forward fast.
- We have a full in-house compliance support for all compliance requirements with the regulator and service providers
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