BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Chris Duncan and Katrina Lindsay, Carey Olsen
• investment management; • investment advice; • custody of investments; • administration of investments; and • operating an investment exchange. “Investments” is also widely defined and may include: • shares, interests in a partnership, or fund interests; • debentures; • instruments giving entitlement to shares, interests or debentures; • certificates representing investments;
carry on financing business and money servic - es business in or from within the BVI. Licences issued under the FMSA authorise a licensee to carry on a particular category or categories of financing or money services business, including money transmission services (Class A licence). Although the consensus is that “money” and “currency” refer to fiat currencies rather than cryptocurrencies, the aforementioned specific exclusion in the VASP Act – whereby any per - son registered under the VASP Act to carry on only the business of providing a virtual assets service will be exempt from the FMSA (and SIBA) – helps to provide certainty on this point to many VASPs (particularly those involved in the transfer of virtual assets from one account to another). However, care will need to be taken where a company is deemed to be carrying out any activities that fall outside the scope of the VASP Act, as the above-mentioned exemption would not apply in those circumstances. A 2018 amendment to the FMSA introduced a new licence class (Class F) which – once open to applications ‒ will permit those licensees to carry on the business of international financing and lending in peer-to-peer fintech markets. 2.3 Compensation Models There are no restrictions in the BVI on the com - pensation models that industry participants are allowed to use to charge customers, whether directly or indirectly. Some common examples include transaction fee-based compensation and subscription fee-based compensation. Care must be taken if a BVI company is propos - ing to adopt a compensation model based on licensing fees. If the BVI company is licensing its rights to any IP assets and receiving a licens - ing fee, it may be caught by the BVI economic
• options; • futures;
• contracts for difference; and • long-term insurance contracts.
If a person is registered under the VASP Act to provide a virtual assets service, that person will not be required to obtain a SIBA licence (or a licence under the Financing and Money Services Act (as amended) (FMSA)) to carry on that same activity (even if that activity would also other - wise be caught under SIBA or FMSA). However, a separate SIBA licence (in addition to VASP registration) would be required if a person also carries on investment business separate and distinct from its VASP activities. Additionally, any pooling vehicle that is invest - ing into the virtual asset space – or is accepting virtual assets by way of subscription and then investing into more traditional asset classes – would be advised to seek BVI legal advice as to whether such activities would require registra - tion as a fund under SIBA. FMSA The FMSA provides the framework for the licens - ing, regulation and supervision of persons who
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