BVI - Relaxing the rules on use of the word "fund"
25 April 2014
Using the word "fund" when naming a BVI entity was previously restricted by the Securities and Investment Business Act, 2010 ("SIBA") to companies which obtained recognition from the BVI Financial Services Commission ("Commission") as a public, professional or private mutual fund or a person granted an investment business licence by the Commission.
Entities such as private equity or closed-end funds, which typically could not seek recognition under SIBA as they were technically outside the scope yet were widely accepted as being a type of fund, were thus placed at a disadvantage when selecting a name. This naming restriction regularly gave such non-regulated entities naming challenges in trying to convey their investment making nature, without using the word fund, with "capital" or "partners" often being used instead.
The Commission recognised the "ongoing desire for BVI business companies and partnerships that are not recognised, registered, licensed or otherwise authorised under SIBA to use the word "fund" in their names and the practical advantages that may arise as a result". As such, the naming restriction has now been lifted allowing a BVI business company or partnership that may be classified as a closed-ended or private equity fund to use the word "fund", providing the prior written consent of the Commission is obtained.
Bedell Cristin can assist in obtaining the consent of the Commission to a non-regulated entity using the word "fund", or changing the name of your existing non-regulated entity to contain the word "fund".