Financial Crime World

FSC Introduces New Requirements for Licensed Trust Companies and Company Managers

The Financial Services Commission (FSC) has introduced several new requirements aimed at enhancing the compliance and financial soundness of licensed trust companies and company managers in the British Virgin Islands.

Enhanced Compliance and Internal Controls

  • Internal Audit Function: Licensed trust companies and company managers are now required to have an internal audit function in place, unless they do not hold customer monies or due to the nature, size, and complexity of their business, it is deemed unnecessary. In such cases, the licensee must notify the FSC in writing within 14 days of making this determination.
  • Compliance Officer’s Register: The Compliance Officer’s register of breaches must now include additional details on remedial action taken to address recorded breaches and the timeframe for taking such action.

Annual Compliance Reports (CORs)

  • New Requirements: CORs are also subject to new requirements. The COR must be submitted to the FSC within three months after the end of each year and include information on:
    • Employee training
    • AML/CTF obligations
    • Suspicious activity reports
    • Significant complaints
    • Internal control structure
    • Compliance with reporting and filing obligations
  • Submission Deadlines: Existing licensees have until October 1, 2020, to submit their 2019 COR, while all licensees must submit their 2020 COR by March 31, 2021. The FSC has encouraged existing licensees to submit their reports in accordance with the new requirements.

Auditors and Professional Indemnity Insurance

  • Auditor Reporting: Auditors of licensed entities are required to submit a copy of their management report and any responses from management within six months after the end of each financial year or as extended by the regulator.
  • Claims Notification: Licensed trust companies and company managers must also notify the FSC and their insurer of any claims or potential claims on their professional indemnity insurance.

Financial Soundness

  • Source of Wealth and Funds: In assessing the financial soundness of regulated persons or applicants, the FSC will now consider the source of wealth and funds of significant owners or controllers. Regulated persons are expected to demonstrate that these individuals have legitimate sources of wealth and funds.
  • Transparency and Accountability: These new requirements aim to enhance the transparency and accountability of licensed trust companies and company managers in the BVI, ensuring compliance with relevant laws and regulations and protecting the interests of customers.

By introducing these new requirements, the FSC aims to ensure that licensed trust companies and company managers maintain high standards of compliance and financial soundness, thereby protecting the interests of customers and maintaining the reputation of the British Virgin Islands as a reputable financial services jurisdiction.