British Virgin Islands mutual funds
In the BVI mutual funds investment business is governed by the Mutual Funds Act, 1996, which is administered by the BVI Financial Services Commission.
The Act regulates, authorize, and controls âopen endedâ mutual funds, the managers and administrators performing business in or from within the territory.
A mutual fund is a company incorporated, a partnership formed, a unit trust organized or other similar body formed or organized under the laws of the BVI or of any other jurisdiction which collects and pools investors funds for the purpose of collective investment, and issues shares that entitle the holder to receive on demand or within a specified after demand an amount computed by reference to the value of the proportionate interest in the whole or in a part of the net assets of the company, the partnership, the unit trust or the other similar body, as the case may be, and includes an umbrella fund whose shares are split into a number of different class funds or sub-funds, and a fund which has a single investor which is a mutual fund not registered or recognized under the Act.
There are three types of mutual funds:
- Private Fund: it is a mutual fund that does not have more than 50 members according to its constitutional documents, or making private invitations to subscribe or purchase or shares.
- Professional Fund: is a mutual fund in which the shares are only available to professional investors, its initial investment, in respect of the majority of each such investor, is not less than $100,000 or its equivalent in any other currency.
- Public Fund: is neither a private or professional fund. Shares are sold to the public.
- Restricted Public Fund: These funds have specific investment objectives, and are considered UCITS equivalent funds.
Both private professional funds are recognized under the Act by a two-pronged test: applicants must prove to a satisfactory level that it is lawfully constituted, and that is complies with the definition of private or professional.
Public funds have to prove they are lawfully constituted and that they comply with the definition of public fund registered under the Act.
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