Tue, 22/02/2011 - 18:15
By Sherri Ortiz - Competition between international financial centres is keener than ever, but the British Virgin Islands has many strong arguments to attract clients from all over the world. Alongside the strengthening and deepening of relationships with existing clients, our aim at the BVI International Financial Centre is to reach out in 2011, in partnership with members of the private sector, to new markets that could benefit from access to BVI services.
In our efforts to develop and extend contacts across the world, it has been gratifying to observe increasing interest in the BVI, as exemplified by the jurisdiction’s position as the world’s foremost incorporation domicile as well as a leading centre for fund services. Its global appeal is down to a sound and business-friendly platform of legislation combined with flexibility and user-friendliness.
This is the product of a close and long-standing relationship between the private sector and public bodies, including the regulator, the BVI Financial Services Commission. It has helped build a reputation for innovation that is a key competitive advantage in the global marketplace and enabled the financial industry to thrive even under adverse global economic conditions.
We will be taking this message to fast-growing markets such as Latin America, China and Russia where increasing wealth is prompting a greater focus on investment planning and structuring issues. At the same time, we hope that an upturn already evident in fund activity in the BVI will lead to the provision of a broader range of value-added services in the territory, including growth in the existing fund administration and accounting sector.
The industry has demonstrated an encouraging recovery from the downturn experienced by alternative funds globally over the past three years. As markets strengthen, there is greater appetite for funds, although investor attitudes remain cautious and the fundraising environment for start-ups is more challenging than a few years ago.
Today, the industry is also grappling with regulatory changes such as the Dodd-Frank Act in the US and the European Union’s Directive on Alternative Investment Fund Managers. We are encouraged that in its final form, the directive no longer seems to threaten non-EU jurisdictions with being arbitrarily excluded from the European market, but we look at the situation very pragmatically.
In a world of increased regulatory focus, it’s incumbent upon jurisdiction such as the BVI to demonstrate that we are capable of satisfying new regulations as they arise. Clients need to know that the BVI is not the kind of jurisdiction that will end up on blacklists or suffer sanctions. What they appreciate about doing business in the BVI is our position as a well-regulated and well-respected jurisdiction that upholds international standards.
Already the BVI meets many of the conditions that will be required for non-EU managers and funds to qualify for a passport under the EU directive, such as the conclusion of tax information exchange agreements and meeting international standards on measures to counter money laundering and terrorist financing.
Meanwhile, last year’s Securities and Investment Business Act has brought the BVI’s funds and securities regulation into line with the standards set by Iosco, of which the jurisdiction is a full member and signatory to its multilateral memorandum of understanding on information-sharing and co-operation in enforcement actions. A level playing field with international standards and transparency principles is the key to a sustainable international financial industry.
Sherri Ortiz is executive director of the British Virgin Islands International Finance Centre
Click here to download a copy of the Hedgeweek Special Report: BVI Hedge Fund Services 2011
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