![]() We're confident that it's going to open up some new opportunities for the BVI, in particular on the PE and VC side, where I think there will be a big push in the market. "It was certainly time to overhaul the existing legislation. One of these amendments relates to the BVI Partnership Act, 1996, which many of the islands' practitioners agree is well overdue an update. To continue its evolution as a leading offshore funds jurisdiction, the BVI is making several amendments to its legislative framework. "We are also keeping fully abreast of issued raised by IOSCO and other standard setters," outlines Malone. In keeping with the FATF requirement, the BVI has undergone a National Risk Assessment which will allow the BVI to maintain compliance with the FATF Recommendation and preparation for a Mutual Evaluation by the Caribbean Financial Action Task Force (CFATF). "For example, the BVI is committed to ensure that its Anti-Money Laundering and Combating the Financing of Terrorism Regime fully meets the Financial Action Task Force (FATF) 40 Recommendation. Malone says that the BVI is committed to ensuring that "it meets all relevant international standards and where those standards have changed, so too has the BVI". Moreover, it is making the necessary adjustments to uphold its commitments to international governance standards. What the BVI has done well to adjust to the new world order – one of increased regulatory compliance and higher costs of doing business – is to support start-up and emerging managers with a light touch regulatory regime. It is an unfortunate symptom of where the industry is today although the latest Preqin figures reveal that global hedge fund assets reached a record USD3.22 trillion at the end of November 2016 this was achieved by industry gains of 7.40 per cent, offsetting net investor outflows of USD102 billion. ![]() The client will be redeeming all outside investors and operate as a family office instead." There are costs of moving towards higher compliance and regulation. It was a sound business but it was no longer cost effective. "They are shutting down five or six funds. "One client here in the BVI is deciding to close up shop because of the cost of compliance and the tedious nature of complying with all of today's regulation, including AIFMD," says Robert Briant, Partner at leading offshore law firm Conyers Dill & Pearman. ![]() And as the costs of running a hedge fund business increase, some are choosing to call it a day and revert to the family office model. Like every fund jurisdiction, the estimated 40 per cent drop in new fund launches in the hedge fund industry last year negatively impacted the BVI.
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