BVI Stories: BVI Investment Fund Association

BVI STORIES: BVI INVESTMENT FUND ASSOCIATION

The landscape of the global economy is changing rapidly. From the rise of cryptocurrencies and digital assets to the growing prominence of ESG and sustainable finance, International Financial Centres are at the forefront of this change, facilitating global growth and international collaboration.

Keeping up with the pace of change requires agility and resilience, and in the British Virgin Islands, the Investment Funds Association (BVI IFA) is playing an important role in ensuring the jurisdiction remains competitive.

The association has a dual function; helping to shape the focus and implementation of new legislation, and advising the BVI Government, BVI Finance, and BVI regulator, the Financial Services Commissions (FSC), on new products and markets to pursue.

The combination of these two activities, and the close working relationship between the IFA and the FSC and Government, has led to an impressive period of growth for the BVI investment funds sector and has positioned the BVI as a world-leading innovative and forward-looking jurisdiction.

LEGISLATIVE COLLABORATION

As the global economic landscape continues to shift and new challenges arise - from climate change and increasingly sophisticated financial crime - it is vital that regulations stay on pace and ensure structures and processes remain fit for purpose. Navigating legislative changes requires close collaboration between the private and public sector and in the BVI. The IFA plays a crucial role in guiding the Government and FSC in guaranteeing that all structures remain compliant whilst mitigating disruption. In recent years legislation such as the Economic Substance Act and the new Private Investment Fund, have been fundamental game changers for the jurisdiction, and their successful implementation and compliance has been a result of this collaborative relationship.

This relationship has been particularly pertinent over the last year as key updates in financial services regulations have taken place, in particularly around anti-money laundering (AML) and know your customer (KYC). In addition, as the BVI Beneficial Ownership register develops in line with evolving global standards, the IFA will play an important role in analysing and explaining how it will affect their area of global financial services.

For the association, remaining engaged with the Government across all this new legislation is vital. Whilst it might not all apply directly to the funds industry, the interrelated nature of the BVI ecosystem means the IFA has an important voice and viewpoint on how new regulations could impact the overall landscape and competitiveness of the jurisdiction.

it lies within is complex and so understanding what exactly the asset class was, how custody solutions would need to look, and how AML and KYC would apply were all essential for taking the leap.

The subsequent success in the BVI in digital assets can be contributed to this regulatory work, and the receptive attitude of the FSC to embrace a different approach and not impose old infrastructures on the new asset class. The BVI is now a worldleading jurisdiction in the space, with institutional players coming to the BVI and bringing further credibility.

This puts the BVI ecosystem in good stead as it continues to strengthen its offering in the sector. For example, new VASP (Virtual Asset Service Provider) legislation came into force last year which will continue to prepare the sector for the future of digital asset management.

LAYING THE GROUNDWORK FOR PROGRESS

The legislative landscape in the BVI is crucial. It enables the government, BVI Finance, and the FSC to plan ahead and pursue the right opportunities, which has contributed significantly to its growth over the last decade.

One prime example of this is the progress being made on cryptocurrencies and digital assets. Back in 2015, when most jurisdictions were turning down digital assets funds, the BVI IFA was going against the grain and starting to explore and engage with these funds, taking on new clients from the United States, which since have grown immensely, showing the bold and forward-thinking ethos in the BVI.

Embracing digital assets and cryptocurrency asset funds requires strong collaboration and trust between the IFA and the FSC, involving extensive due diligence and research to explain why this was an opportunity worth embracing. The regulatory landscape

LOOKING AHEAD

The success and growth of the BVI Investment Fund sector has been a result of these combined factors; the collaborative approach to legislative process, the reciprocal relationship between the public and private sectors, and the willingness to be bold and embrace new markets and opportunities.

It is this combination that is allowing the IFA to remain agile in the face of change and adopt a future-looking perspective, building on the work that has been done to ensure the BVI remains a world-leading IFC for innovative and collaborative investment.