BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Chris Duncan and Katrina Lindsay, Carey Olsen
6.6 Rise of Peer-to-Peer Trading Platforms
on “virtual assets service” in respect of that vir - tual asset will be subject to regulation under the VASP Act. Where an asset falls within the scope of the definition of an “investment” for the pur - poses of SIBA, any person carrying on “invest- ment business” in respect of that investment will
A BVI company may be required to be regulated under SIBA for arranging deals in investments if it provides a platform through which buyers and sellers of investments (as such term is defined in SIBA) are matched. Unless the BVI entity has any control at any time over the assets traded via a peer-to-peer platform, it is likely that the activi - ties will fall outside of the scope of the VASP Act. A BVI entity will be required to obtain a Class F licence pursuant to the FMSA (once available for issuance) if it is deemed to be carrying on the business of international financing and lending in the peer-to-peer fintech market. 6.7 Rules of Payment for Order Flow There are no rules permitting or prohibiting pay - ment for order flow in the BVI. 6.8 Market Integrity Principles In line with internationally accepted standards for the prevention of market abuse and similar financial crimes, SIBA contains criminal offences for persons who make misleading statements relating to investment business, conduct insider trading or carry on market manipulation when in the BVI. While there is no market abuse regime in place for virtual assets as yet, the Regulatory Code requires licensees to establish and maintain poli - cies, systems and controls that promote high ethical and professional standards (with the dissemination of false or unverified information likely constituting a breach of such policies, sys - tems and controls). Furthermore, the CMCA criminalises unauthor - ised access to and use of computer materials,
be subject to regulation under SIBA. 6.3 Impact of the Emergence of Cryptocurrency Exchanges
Virtual asset exchanges are subject to enhanced regulatory oversight under the VASP Act. In addi - tion to complying with the general requirements for a VASP, a virtual assets exchange must also be able to demonstrate the measures in place for the facilitation and protection of virtual assets trading on the virtual assets exchange, together with appropriate organisational, managerial and financial resources to ensure the proper opera - tion of the virtual assets exchange, as well as adequate measures to monitor and mitigate any risks related to the operation of the virtual assets exchange. 6.4 Listing Standards The standards by which each licensed entity chooses to list different products will be set and maintained by that licensed entity as part of their application for a licence. However, when approving and registering a VASP to operate a virtual assets exchange, the FSC may impose conditions relating to the listing of virtual assets (including issues relating to filing reports and providing net worth with regard thereto). 6.5 Order Handling Rules Licensees under SIBA must comply with certain dealing and managing rules, including order handling rules, in accordance with the Regula - tory Code.
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