The Banks and Trust Companies Act 1990 (the BTCA) was amended by the Banks and Trust Companies (Amendment) Act 2022. The amendments were assented to on 23 December 2022 and published in the Gazette on 29 December 2022.

In order of importance:

• The concept of “principal office” has been enhanced. This refers to a place or an office of a licensee, from which the business of the person is mainly carried out. With the implementation of this definition and related changes, BTCA licensees will now need to ensure that they have effectively appointed a principal office function in the BVI and will need to ensure that the licensee has retained staff and premises at the principal office that will ensure that the licensee’s regulated business activities are conducted at the principal office in the BVI. This is a significant change to the regime and steps up requirements on licensees to have economic substance in the BVI.
• A new definition of “controlling interest” has replaced the previous version. In relation to a licensee this means (a) the ownership or interest in the licensee or in any holding company of the licensee by a person who has (i) more than 50 per cent of the voting rights of the licensee or (ii) a significant interest in the licensee which, although not constituting 50 per cent of the voting rights of the licensee (in aggregate or otherwise), gives the person a considerable advantage in the voting rights of the licensee; and (b) includes a person referred to in subjection 2(7) of the BTCA. Importantly, this is a brand new definition that replaces the old definition of controlling interest. The definition of controlling interest is given some weight and clarity with the implementation of a test for a person who is to be treated as holding a controlling interest ie where:
  • the person has an influence over the activities of any undertaking of the licensee without having a significant interest in the undertaking; or
  • a director or senior officer of the licensee is accustomed to acting on the instructions of the person.
• A new concept of “bridge bank” has been introduced. This is a bank licensed to temporarily take over and maintain all or certain assets, operations and liabilities of a failed bank as part of the resolution process with respect to the failed bank. This is effectively a new type of banking licence that is being made available under the BTCA. New detailed provisions cover the resolution processes relevant to BVI banking institutions.
• When licensing applications are being submitted, there is now a requirement on the applicant to provide a written undertaking to the BVI FSC to provide it with a copy of its policy of deposit insurance issued in accordance with the provisions of the BVI’s Deposit Insurance Act 2016, within six months of the issue of the licence.
• Systemically important banks: This new section allows the BVI FSC the power to, where after the granting of a banking licence, designate a licensee as a systemically important bank. Where such a designation occurs, the licensee must in addition to the requirements under the BTCA, and any other financial services enactment applicable to the licensee comply with such requirements.

A copy of the Amendment can be found here.

Should any existing BTCA licensees or persons intending to apply for BTCA licenses have any queries, please feel free to contact us for assistance.