BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Chris Duncan and Katrina Lindsay, Carey Olsen
7.3 Regulatory Distinction Between Funds and Dealers Funds engaged in trading activities on a proprie - tary basis will not be required to obtain a licence under SIBA or the VASP Act in relation to this specific activity. However, the fund would need to be regulated in accordance with the BVI fund legislative regime, and any investment adviser or investment manager carrying on investment business activities for and on behalf of the fund may require a licence to carry on these activities under SIBA or the VASP Act (as applicable). Dealers carrying on business for and on behalf of others will need to be registered as a VASP if they are dealing with virtual assets (or, under SIBA, if the assets in which they are dealing are deemed to be investments for the purposes of SIBA). 7.4 Regulation of Programmers and Programming Programmers who develop and create trading algorithms and other electronic trading tools are currently not specifically regulated in the BVI. Indeed, the VASP Act explicitly excludes activi - ties relating to the development and deployment of the underlying fintech technology from the scope of regulation.
including offences relating to electronic defama - tion, forgery and fraud.
7. High-Frequency and Algorithmic Trading 7.1 Creation and Usage Regulations While no specific regulations currently exist for the creation and usage of high-frequency trad - ing and algorithmic trading in the BVI, fintech participants engaging in such activities may fall within the scope of ‒ and be required to comply with ‒ the existing regulatory regime. 7.2 Requirement to Be Licensed or Otherwise Register as Market Makers When Functioning in a Principal Capacity Pursuant to SIBA, buying, selling, subscribing for or underwriting investments as principal where the person holds themself out as engaging – as a market maker or dealer ‒ in the business of buying investments of the kind to which the transaction relates, with a view to selling them, will constitute an activity requiring a Category 1 licence (Dealing in Investments). Market makers trading virtual assets (rather than traditional investments) in a principal capacity would be expected to fall outside the scope of the VASP Act, unless those market-making activities are provided for a third party such as an exchange. This is on the basis that the VASP Act regulates only those VASPs providing virtual asset services as a business for and on behalf of others (and not players functioning in a princi - pal capacity). A thorough examination of agree - ments between these individuals and trading platforms or exchanges is essential to determine their classification in each case.
8. Insurtech 8.1 Underwriting Processes
There do not appear to be any specific and material insurtech underwriting initiatives or developments in the BVI. 8.2 Treatment of Different Types of Insurance The overarching goal of industry participants (including domestic or captive insurers, insur -
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