Continuing obligations for incubator funds The board and officers Functionaries and other service providers Notice requirements Event triggering an obligation to notify the FSC Time frame Notices in relation to an incubator fund's validity period Annual regulatory and government requirements Due by date Action Reporting and financial statements Anti-money laundering obligations Fund policies and arrangements Obligations under FATCA and CRS Beneficial ownership regime

As a mutual fund, your incubator fund is regulated by the British Virgin Islands (BVI) Financial Services Commission (the FSC). This note provides a quick reference to your incubator fund's ongoing BVI obligations.

Incubator funds are governed by the Securities and Investment Business (Incubator and Approved Funds) Regulations, Revised Edition 2020 (the Regulations) and the Incubator and Approved Funds Guidelines.

An incubator fund must:

At all times have at least two directors, at least one of whom must be an individual

Appoint an appropriately qualified and independent individual as Money Laundering Reporting Officer (MLRO) for the fund who may, in practice, be a person provided by one of the functionaries to the fund (see below for more detail on anti-money laundering obligations)

Appoint a Foreign Account Tax Compliance Act (FATCA) Responsible Officer and a principal point of contact for the BVI International Tax Authority (ITA)(see below for more detail on obligations under FATCA and CRS)

An incubator fund is required to have an FSC licenced authorised representative (Authorised Representative) at all times to act as a point of contact between the fund and the FSC.

This is a service offered by our strategic alliance partner, Craigmuir Authorised Representative Limited.

It is not required to have any other functionaries or service providers, although it is free to appoint them should it wish to.

On the happening of certain events, an incubator fund is required to notify the FSC. The table below summarises these notification requirements and the timeframe for providing notice.

An Authorised Representative ceasing to hold office (for whatever reason)

Immediately

Any change to the information provided to the FSC with the application ie:

change of Authorised Representative;

change of director or general partner or to any details provided in relation to a director or general partner;

amendment to constitutional documents;

amendment to offering document (if applicable); and/or

change to investment warning and/or description of investment strategy (where there is no offering document)

Within 14 days

Total number of investors exceeds the threshold for two consecutive months

Within 7 days of the

end of the second

month

Maximum value of the fund's assets exceeds the threshold for two consecutive months

Within 7 days of the

end of the second

month

Any matter related to the conduct of the business activities of the fund which may have a material impact on the fund (for example a suspension of subscriptions or redemptions or becoming subject to legal or regulatory proceedings)

Immediately

Number of directors falls below two (for whatever reason)

Immediately

The initial period of validity of an incubator fund is two years. If an incubator fund wishes to extend its period of validity for a period not exceeding 12 months, it must submit a written application to the FSC requesting the extension at least one month prior to the end of its period of validity (or such shorter period as the FSC may approve).

If an incubator fund wishes to continue to operate after the end of the validity period, it must submit to the FSC an application to convert into a private, professional or approved fund at least two months prior to the expiry of the validity period (or such shorter period as the FSC may approve).

If the incubator fund is applying to convert to a private or professional fund, it must also prepare and submit to the FSC an audit of its current financial position and compliance with the requirements of the Regulations at least two months prior to the expiry of the period of validity.

There are various reporting and payment deadlines for an incubator fund throughout the year.

31 January

File semi-annual return in respect of previous six months with the FSC

31 January

Submit a statement that the fund is not in breach of the requirements of the Regulations

31 March

Pay approval fee of US$1,200 to the FSC. Failure to pay may attract administrat...