The reputation of the BVI for enacting responsible but flexible and simple legislation for the regulation of all sectors of its financial services industry was the driving force behind the introduction of the Mutual Funds Act, 1996.  The introduction of the Act has shown that the BVI Government is committed to the concept that appropriate regulation is desirable, while fraudulent or dishonest conduct is prohibited and high quality business is welcomed and encouraged.  This Act came into force on the 2^nd January, 1998.

The Act describes a mutual fund as:

“a legal vehicle organised under the laws of the BVI or of any country or jurisdiction which collects and pools funds for the purpose of collective investment in accordance with the principle of risk spreading”.

Funds are classified into one of three categories: private, professional or public.

A private fund is defined as a fund whose constitutional documents either prohibit more than 50 investors or specify that it must be made available only on a private basis (e.g. to specified persons or by reason of private or business connection).

A professional fund is defined as a fund made available only to professional investors or individuals with net worth of over US$1,000,000 and where the majority of initial investments must be US$100,000 or more.

Both of these classes of funds need only be recognised; registration is not required.  In order to be recognised they must provide proof that they fall within the definition and that they are lawfully constituted.  A professional fund can benefit from a fast track launch procedure which allows it to commence business 14 days prior to being recognised.

The key requirements for the registration of a public fund are the filing of:

We provide a full range of services in relation to the initial set up and administration of funds under this Act, usually through the corporate vehicle of an IBC.  Specific services which can be provided include but are not limited to: