The BVI updates the Financial Services Commission Act 2001
15 Nov 2024
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The Financial Services Commission Act 2001 (the FSC Act) is the umbrella to the financial services legislation in the BVI. The FSC Act has recently been amended by the Financial Services Commission (Amendment) Act 2024 (the Amendment). The Amendment was assented by the Governor of the BVI on 29 October 2024 and Gazetted on 7 November 2024. The Amendment is not yet in force and will come into force on such a date as the Minster may by Notice publish in the Gazette.
A summary of some the main changes relate to:
- Consumer protection and duty standards: A “consumer duty” standard has been defined to ensure financial services businesses prioritise consumer care. The Commission can now enforce regulations covering product governance, anti-discrimination measures, and consumers' right to transparent, understandable contracts.
- Enhanced penalties: Fines for non-compliance have been significantly increased, with certain penalties rising to $75,000. This aims to strengthen deterrence against regulatory breaches.
- Risk-based supervision: The Commission is mandated to adopt a risk-based approach in assessing regulated entities, focussing on risks specific to each licensee or licensee class, as well as the potential impact on the BVI’s financial stability.
- Operational flexibility in crises: The Amendment allows the Board to hold electronic meetings and take emergency decisions in times of exceptional circumstances, such as natural disasters or civil unrest. This ensures that regulatory functions remain effective even when traditional operations are disrupted.
- New compliance mandates: The Commission’s compliance mandate has been broadened, with new authority to inspect licensees or appoint third parties for compliance checks. Licensees are also required to cooperate fully by providing necessary information and documents.
- Conflict of interest disclosure: Employees of the Commission must disclose any personal, professional, or financial interests that might conflict with their duties, reinforcing transparency within the regulatory body.
- Financial literacy and education: The Commission is now allowed to receive donations and contributions to support financial literacy initiatives, aiming to promote better consumer understanding of financial services.
- Board and committee adjustments: The Amendment decreases the required number of Board meetings annually, refines the roles of Board members, and adds disqualification criteria for conflicts of interest.
The Amendment can be found here.
