'The Securities And Investment Business Act, 2010 - A Statute For A New Era In Financial Services'

After much anticipation, the Securities and Investment Business Act, 2010 ("SIBA") came into force in the British Virgin Islands ("BVI") on 17 May 2010. The enactment of SIBA represents an important step for the continued development and growing sophistication of the financial services sector within the BVI and this new statute will represent the cornerstone for the regulation of much of the BVI's financial services industry for a number of years to come.

Importantly on a global stage, SIBA should ensure that the Financial Services Commission's regulation of the BVI's financial services industry remains in tune with the evolving global regulatory standards, demonstrating the jurisdiction's continued commitment to implement international best practice for financial services regulation.

Objectives of SIBA

SIBA has four principal objectives, being to:

introduce an investment business licensing regime to regulate entities conducting "investment business" in or from within the BVI; adopt restrictions on and regulations for the making of "public issues of securities" into the BVI; update and modernise the regulation of the BVI investment funds industry, by repealing the Mutual Funds Act, 1996 (which was the statute that had regulated the BVI's investment funds industry for more than a decade) and replacing it by SIBA, the Mutual Funds Regulations and the Public Funds Code; and introduce a market abuse regime. Dealing with each of these objectives in turn, the key features are as follows:

Investment Business

Any person carrying on activities constituting "investment business" in or from within the BVI involving "investments" will, under SIBA, be required to hold an investment business license specifically authorising that kind of investment business. For these purposes, "investments" are as follows:

shares, interests in a partnership or fund interests; debentures, other debenture or loan stock, bonds, certificates of deposit and other instruments acknowledging indebtedness; instruments giving entitlements to shares, interests or debentures; certificates representing investments; options; futures; contracts for differences; long-term insurance contracts; rights and interests in investments; and such other things as maybe specified as investments in the Investment Business Regulations. Activities constituting "investment business" are as follows:

dealing in investments; arranging deals in investments; managing investments; providing investment...