The BVI Welcomes Hedge Fund Managers With A 'Lighter Touch' Regulatory Regime

The British Virgin Islands ("BVI") has a regulatory regime which makes it significantly easier for small to mid-size hedge fund groups to establish investment managers and advisors in the BVI. For investment managers and advisors that qualify, this "approved manager" regime substantially reduces the time and cost of establishing new fund structures and entails significantly less ongoing regulation than is typically the case.

1. Background and Qualifying Criteria

Hedge fund managers and advisors incorporated in the BVI generally require an investment business licence under the Securities and Investment Business Act, 2010 ("SIBA"). The process for obtaining an investment business licence under SIBA is relatively onerous and, upon obtaining such a licence, a manager or advisor is subject to regulation under SIBA and the BVI Regulatory Code, 2009 (the "Regulatory Code").