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BRITISH VIRGIN ISLANDS

BANKS AND TRUST COMPANIES ACT, 1990

Short title.

1. This Act may be cited as the Banks and Trust Companies Act, 1990.

PART I - Preliminary
Interpretation

2.(1) In this Act,

“auditor” means a person who

(a) is qualified as an accountant by examination conducted by one of the institutes of Chartered Accountants or Certified Accounts in England and Wales, Ireland or Scotland, the Canadian Institute of Chartered Accountants or the American Institute of Certified Public Accountants and is a current member in good standing of one of those institutes; or

(b) possesses such other qualification in accountancy as the Governor in Council, by order, approves and is in good standing with respect to such qualification;

“authorized agent” means a person designated an authorized agent by a bank or trust company under paragraph (b) of subsection (1) of section 9;

“bank” means a person carrying on banking business;

“banking business” means the business of receiving (other than from a bank or trust company) and holding on current, savings, deposit or similar account money that is repayable by cheque or order and is capable of being invested by way of advances to customers or otherwise but does not include the receiving on savings, deposit or similar account money which is paid by one company to another at a time when

(a) one is the subsidiary of the other; or

(b) both are subsidiaries of another company;

“financial year” means, in relation to a licensee under this Act,

(a) the period not exceeding 53 weeks at the end of which the

balance of the licensee's account is struck; or

(b) if no such balance is struck, or if a period in excess of 53 weeks is used, then, a calendar year;

“Governor” means the Governor in Council;

“Inspector” means the Inspector of Banks and Trust Companies appointed under subsection (1) of section 15;

“licence” means a licence granted under subsection (3) of section 4;

“licensee” means a company holding a licence under this Act;

“Registrar” means the Registrar of the High Court;

“trust company” means a company carrying on trust business;

“trust” means the legal relationship created inter vivos or on death by a person, known as a settlor or grantor, when assets have been placed under the control of a person, known as a trustee, for the benefit of a person, known as a beneficiary, or for a specified purpose or when a person declares that he holds assets as trustee for the benefit of a beneficiary or a specified purpose and

(a) the assets constitute a separate trust fund and are not part of the trustee's own estate;

(b) title to the trust assets stand in the name of the trustee or in the name of another person on behalf of the trustee; and

(c) the trustee has the power and the duty, in respect of which he is accountable, to manage, employ or dispose of the assets in accordance with the terms of the trust and the special duties imposed on him by law;

“trust business” means the business of

(a) acting as a professional trustee, protector or administrator of a trust or settlement;

(b) managing or administering any trust or settlement; and

(c) company management as defined by the Company Management Act, 1990.

(2) For the purposes of this Act and subject to subsection (5), a company is deemed to be a subsidiary of another if

(a) that other either

(i) is a member of it and controls the composition of its board of directors, or

(ii) holds more than half in nominal value of its equity share capital; or

(b) the first mentioned company is a subsidiary of any company that is the other's subsidiary.

(3) For the purposes of subsection (2), the composition of a company's board of directors is deemed to be controlled by another company if that other company by the exercise of some power exercisable by it without the consent or concurrence of any other person can appoint or remove the holders of all or a majority of the directorships.

(4) For purposes of subsection (3), the other company is deemed to have power to appoint to a directorship with respect to which any of the following conditions is satisfied:

(a) that a person can not be appointed to it without the exercise in his favour by the other company of such a power as is mentioned in subsection (3);

(b) that a person's appointment to the directorship follows necessarily from his appointment as a director of the company; or

(c) that the directorship is held by the other company itself or by a subsidiary of it.

(5) In determining whether one company is a subsidiary of another

(a) any shares held or power exercisable by the other in a fiduciary capacity are to be treated as not held or exercisable by it;

(b) subject to paragraphs (c) and (d), any shares held or power exercisable

(i) by any person as nominee for the other except where the other is concerned only in a fiduciary capacity, or

(ii) by, or by a nominee for, a subsidiary of the other not being a subsidiary which is concerned only in a fiduciary capacity, are to be treated as held or exercisable by the other;

(c) any shares held or power exercisable by any person by virtue of the provisions of any debentures of the first mentioned company or of a trust deed securing any issue of such debentures are to be disregarded; and

(d) any shares held or power exercisable by, or by a nominee for, the other or its subsidiary, not being held or exercisable as mentioned in paragraph (c), are to be treated as not held or exercisable by the other if the ordinary business of the other or its subsidiary, as the case may be, includes the lending of money and the shares are held or the power is exercisable as abovementioned by way of security only for the purposes of a transaction entered into the ordinary course of that business.

(6) For purposes of this Act,

(a) a company is deemed to be another's holding company if the other is its subsidiary; and

(b) a body corporate is deemed the wholly-owned subsidiary of another if it has no members except that other and that other's wholly owned subsidiaries and its or their nominees.