The panel appointed by the British Virgin Islands' Financial Services Commission (FSC) to issue recommendations on the way forward for international business companies (IBCs) in the wake of the International Business Companies (Amendment) Act 2002, has completed its final report.
The 2002 Act introduced sweeping changes to the jurisdiction's controversial 'bearer shares' regime, immobilizing the flexible shares, and requiring them to be held in the custody of an "authorised" or "recognised" custodian in the future.
The legislation also provided for companies to amend their memoranda and articles of association, which are what allow an IBC to issue bearer shares.
The main recommendation put forward by the panel was for a seven year transition period before the new law takes full effect.
According to an FSC statement, under the plan put forward in the report, for the first four years, the situation for existing IBCs would essentially remain stable. For a further three years after that period, IBCs that retain the right to issue bearer shares would pay a small increase in their license fee.
The Commission went on to announce that a separate bill to amend the FSC Act by making provision for authorised and recognised custodians, will be introduced soon.
Speaking this week, managing director and CEO of the Financial Services Commission, Robert Mathavious announced that:
"The panel has dealt with this issue according to the BVI's guiding principles of self-regulation, market discipline and official oversight. We also wanted to avoid undue burdens on the service providers, their clients and the Register. I believe that the recommendations are a sensible combination of balancing effective regulation with recognition of the commercial needs of the market."
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