BVI Securities and Investment Business License - Investment Advice_Guideline

BVI Securities and Investment Business License – Investment Advice Securities and investment business is regulated in BVI by the Securities and Investment Business Act (SIBA) 2010. SIBA regulates “investment business” in or from with the BVI and provides that no person may carry on “investment business” of any kind in or from within the BVI unless they are licensed by the BVI Financial Services Commission (“FSC”) to carry on such investment business. Permitted Activities The types of activity constituting investment business are broadly defined in Schedule 2 of SIBA as follows:

1. dealing in investments;
2. arranging deals in investments;
3. managing investments;
4. providing investment advice;
5. providing custodial services with respect to investments;
6. providing administrative services with respect to investments; and
7. operating an investment exchange.

Categories and Sub-Categories of Investment Business License The following are the categories: Category 1: Dealing in Investments

1. Sub-category A: Dealing as Agent
2. Sub-category B: Dealing as Principal

Category 2: Arranging Deals in Investments Category 3 Investment Management

1. Sub-category A: Managing Segregated Portfolios (Excluding Mutual Funds)
2. Sub-category B: Managing Mutual Funds
3. Sub-category C: Managing Pension Schemes
4. Sub-category D: Managing Insurance Products
5. Sub-category E: Managing Other Types of Investment

Category 4: Investment Advice

1. Sub-category A: Investment Advice (Excluding Mutual Funds)
2. Sub-category B: Investment Advice (Mutual Funds)

Category 5: Custody of Investments

1. Sub-category A: Custody of Investments (Excluding Mutual Funds)
2. Sub-category B: Custody of Investments (Mutual Funds)

Category 6: Administration of Investments

1. Sub-category A: Administration of Investments (Excluding Mutual Funds)
2. Sub-category B: Administration of Investments (Mutual Funds)

Category 7: Operating an Investment Exchange Legal Requirements

Sr. No	Element	Requirement(s)
	Entity Requirements	The entity making the application is a BVI company under the BVI Business Companies Act 2004. Company includes: a company limited by shares; a company limited by guarantee that is not authorised to issue shares; a company limited by guarantee that is authorised to issue shares; an unlimited company that is not authorised to issue shares; or an unlimited company that is authorised to issue shares.
	Director’s Requirements	The licensee will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction. A licensee shall not appoint a director or senior officer without the prior written approval of the Commission. The director must pass the fit and proper criteria
	Shareholder requirements	The licensee will need at least one shareholder. Corporate shareholding is allowed and 100% foreign ownership is permitted.
	Authorized Representative	Unless the licensee has a significant management presence in the BVI, it will be required to appoint a local “authorized representative”, which will be a BVI entity or individual certified by the FSC for this purpose.
	Local Office	A licensee shall not, without the prior written approval of the Commission: open, maintain or carry on business through a branch or a representative or contact office outside the Virgin Islands; or incorporate, form or acquire a subsidiary.
	Auditor	The relevant licensee shall appoint and at all times have an auditor for the purposes of auditing its financial statements. The auditor must be: qualified under the Regulatory Code to act as the auditor of a licensee consent to act as auditor
	Insurance	A licensee shall at all times maintain such professional indemnity and other insurance as may be prescribed.
	Minimum Capital Requirements	Where the Regulatory Code prescribes a minimum capital resource requirement with respect to a category or sub-category of license, a licensee holding a license in such category or sub-category shall ensure that at all times its capital resources are maintained in an amount not less than the prescribed minimum.

Ongoing Obligations

1. The financial statements of a Licensee, signed by a director or trustee of a unit trust, must be submitted to the FSC within six months of the end of its financial year accompanied by:
2. a director’s or trustee’s certificate in the approved form;
3. an auditor’s report;
4. a report on the affairs of the Licensee made in respect of the relevant financial year to the members or investors of the Licensee; and
5. such other documents as may be prescribed from time to time.
6. A Licensee must appoint and at all times have an authorised representative who shall be a person or entity resident in the BVI and certified by the FSC, unless the Licensee has a significant management presence in the BVI determined in accordance with the Regulatory Code, 2009 (the “Regulatory Code”).
7. A Licensee must appoint and at all times have an auditor for the purpose of auditing its financial statements whose appointment has been approved by the FSC in writing prior to their appointment.
8. A Licensee must keep records for at least five years (even after the cancellation or revocation of a Licensee’s licence) which: (i) are sufficient to show and explain its transactions; (ii) allow its financial position to be determined with reasonable accuracy at any time; (iii) enable it to prepare such financial statements and make such returns as it is required to make under SIBA and the Regulatory Code; and (iv) to enable its financial records to be audited in accordance with SIBA.
9. A Licensee must ensure that client assets are identified or identifiable and appropriately segregated and accounted for and make arrangements for the proper protection of client assets.
10. Licensees must at all times maintain their business in a financially sound condition by: (a) having assets; (b) providing for its liabilities; and (c) generally conducting its business, so as to be in a position to meet its liabilities as they fall due.
11. Where the Regulatory Code prescribes a minimum capital resource requirement applicable to a category of licensee then a Licensee must ensure that at all times its capital resources are maintained in an amount not less than the prescribed minimum (or such other amount as may be specified by the FSC).

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