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BVI Establishes Financial Services Commission

Tax-News.com, London

11 January 2002

The British Virgin Islands (BVI) Government established an independent regulatory body - to be called the Financial Services Commission (FSC) - on 1 January 2002.

The announcement of the establishment of the FSC follows recommendations published last year by KPMG, which identified the key components of a well-run financial centre. The establishment of an independent regulatory authority satisfies these KPMG requirements.

The formation of the FSC will see the division of the marketing and regulatory functions within the BVI offshore financial services centre. In practical terms the FSC will mean maintenance of the clear regulatory standards set out in previous legislation such as the Anti-Money Laundering Code of Practice (2000) and the Financial Services
(International Co-operation) Act 2000. The FSC's primary functions will include:

  • Protecting consumers by ensuring that all firms, individuals etc. authorised to provide financial services in and from the BVI are competent and financially sound;
  • Promoting improvements in public understanding of the benefits and risks associated with financial products;
  • Instigating and pursuing action, including the imposition of fines, and issuing "cease and desist" orders;
  • Monitoring, detecting and preventing financial crime, as well as assisting in the prosecution of crime;
  • Pursuing these objectives in a way that is economic and efficient and which ensures that costs and restrictions on firms are proportionate to the benefits of regulation;
  • Facilitating innovation in Financial Services in the jurisdiction;

The new FSC will ensure all BVI companies comply with the same standards. The regulator will be required to do more than simply administer and enforce the law, it will also be relied upon to provide guidance within the financial services industry.

In fulfilling its role, the BVI FSC will work in partnership with business to ensure that regulation enhances the BVI financial services offering.

The key personnel of the FSC will be appointed from the current personnel of the BVI Financial Services Department (FSD). The present marketing and promotional role of the FSD will be transferred to a special Financial Services Marketing Unit (FMSU) within the BVI Government.

Robert Mathavious, Director of the BVI Financial Services Department commented:

"A number of autonomous regulatory authorities have recently been created in offshore centres such as Isle of Man, Channel Islands and BVI feels that it is a key requirement in order to maintain and build on its position as a leading financial centre.

"Merely enacting legislation is not enough, it is essential to have the resource and legislative powers to allow the regulatory body to effectively fulfil its role - the BVI FSC will have this necessary resource. The FSC will also be adopting a partnership approach, not only with businesses but also with international and domestic communities, so
that we can fulfil our role effectively.

"Everyone in the BVI is very pleased that the FSC has now come to fruition and we are committed to ensuring that the FSC further strengthens BVI's market-leading position within the financial services industry."

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