BRITISH VIRGIN ISLANDS Features of a Segregated Portfolio Company GOVERNING LAW

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Darlene Thornton
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1 BRITISH VIRGIN ISLANDS Features f a Segregated Prtfli Cmpany GOVERNING LAW The BVI Business Cmpanies Act 2004, as amended in 2005, 2006 and 2012 ( BVI BC Act ) and the Segregated Prtfli Cmpanies Regulatins, 2005 (S.I N. 96) BUSINESS TRANSACTIONS A segregated prtfli (cmmnly referred t in sme jurisdictins as prtected cell r segregated accunt ) is an internal accunt f a SPC t which may be attributed assets and liabilities that are generally separated frm the assets and liabilities f the cmpany s rdinary accunt, called, its general assets and als separate frm assets and liabilities attributed t the SPC s ther segregated prtflis (if any). An SPC may be used fr a variety f insurance purpses, including rent-acaptives, life and annuity cmpanies, transfrmer vehicles, as well as financial guarantee, securitizatin and derivatives structures and special purpses vehicles, nt t mentin numerus uses in the mutual and hedge fund industries. COMPANY NAME The name f as SPC must include the letters SPC r the wrds Segregated Prtfli Cmpany in its name. OBJECTS The Memrandum and Articles f Assciatin f the SPC shall state that the cmpany is a segregated prtfli cmpany. SHARES An SPC cmpany may in respect f a segregated prtfli, issue shares, the prceeds f which shall be included in the segregated prtfli assets f the segregated prtfli in respect f which the segregated prtfli shares are issued. Segregated prtfli shares may be issued in ne r mre classes and a class r segregated prtfli shares may be issued in ne r mre series. The Memrandum f an SPC is nt required t state the classes f segregated prtfli shares that an SPC is authrized t issue.

2 APPLICATION PROCEDURE Prir t the incrpratin r registratin f an insurer r mutual fund SPC, an applicatin in the prescribed frm accmpanied by the relevant supprting dcuments must be submitted t the Financial Services Cmmissin seeking the Cmmissin s apprval fr the insurer r fund t be incrprated r registered as an SPC; The name r prpsed name f the cmpany; Details f the persn wh is r wh will be appinted as, the administratr f the cmpany; A list f the initial segregated prtflis that it is intended will be created, including the name, identificatin r designatin f each segregated prtfli; and In respect f each f the initial segregated prtflis that it is intended will be created, details f the functinary wh will be appinted by the cmpany t act in respect f the prtfli. An applicatin fr apprval t incrprate a cmpany as a SPC shall be accmpanied by An applicatin under the Mutual Funds Act fr the recgnitin f the cmpany as a private r prfessinal fund r fr the registratin f the cmpany as a public fund; The dcuments required by the Mutual Funds Act t accmpany such applicatin; and A cpy f the ffering dcument fr each f the initial segregated prtflis that it is intended will be created. The Cmmissin may require an applicant t furnish it with such ther dcumentatin and infrmatin as it cnsiders necessary t determine the applicatin. On receipt f the applicatin if it is satisfied that the cmpany has, r has available t it, the knwledge and expertise necessary fr the prper management f segregated prtflis, the Cmmissin may, give its apprval t the incrpratin r registratin as a segregated prtfli cmpany subject t such cnditins as it cnsiders apprpriate. The Cmmissin may at any time, vary r revke any cnditin subject t which an apprval was given and impse any cnditin in respect f such apprval. FUNCTIONARIES AND AUDITORS A mutual fund SPC must, at all times at least tw r mre directrs, at least ne which is a natural persn, ne r mre administratrs, managers, an custdians and may appint ne r mre investment advisrs. The instrument under which a

3 functinary is appinted must specify the respective prtfli r prtflis in respect f which the functinary is appinted and his respnsibilities and duties in respect f each segregated prtfli. A mutual fund SPC must als have an auditr wh will be respnsible fr auditin its financial statements and such audited financial statements must be filed with the Cmmissin within six mnths f the end f its financial year. ACCOUNTS, RECORDS AND REGISTERS An SPC is required t keep financial recrds, which are sufficient t shw and explain the cmpany s transactins and will, at any time, enable the financial psitin f the cmpany t be determined with reasnable accuracy. The financial statements f an SPC must take int accunt the segregated nature f the cmpany and must include an explanatin f: The nature f the cmpany; Hw the segregatin f the assets and liabilities f the cmpany impacts upn members f the cmpany and persns with whm the cmpany transacts; and The effect that any existing deficit in the assets f ne r mre segregated prtflis f the cmpany has n the general assets f the cmpany. The cmpany's accunting bks, recrds and minutes may be kept in any place r cuntry chsen by the directr. M&AA and its amendments. Cpies r riginals f Register f Members, and Register f Directrs and Officers (If the riginal Registers f Directrs and Register f Sharehlders alng with any minutes f meetings, reslutins issued thrughut the cmpany's existence, are kept at a different lcatin than the Registered Office the cmpany shall prvide the registered agent with a written recrd f the physical address f the place r places at which these recrds are kept). Letter f Cnsent t act as Directr(s) Crprate Seal (stamped). Register f Mrtgages and Charges (if any) Annual accunts are neither required t be presented nr need t be filed. REGISTERED OFFICE, CORPORATE SEAL AND LEGALISATION Registered Office in the British Virgin Islands required. Crprate seal mandatry. The Apstille is nrmally used t legalize dcumentatin.

4 NOTIFICATION TO COMMISSION IN CHANGE OF INFORMATION SUBMITTED An SPC shall, by written ntice, ntify the Cmmissin f any change in infrmatin that is required t be submit t the Cmmissin within 14 days f the COSTS AND FEES Applicatin Fees Fr an applicatin fr apprval t incrprate r register a cmpany as mutual fund SPC under sectin 135 f the BC Act, and applicatin feed cmprising the ttal f: In respect f the cmpany US$1000 In respect f each segregated prtfli included in the applicatin US$250 Fr an applicatin fr apprval t create n re mre segregated prtflis in respect f each segregated prtfli included in the applicatin, an applicatin fee f US$250 Fr the ntificatin f the creatin f ne r mre segregated prtflis in respect f each segregated prtfli included in the ntificatin, an applicatin fee f US$250. Initial Fees A mutual fund shall pay the fllwing fees: Where the mutual fund is incrprated r registered n r befre 30 June in any year, an initial fee n incrpratin r registratin cmprising the ttal f: In respect f the cmpany US$1000 In respect f each segregated prtfli apprved US$100 Where the mutual fund is incrprated r registered n r after 1 July in any year, an initial fee n incrpratin r registratin cmprising the ttal f: In respect f the cmpany US$500 In respect f each segregated prtfli US$50 On apprval being granted t create ne r mre segregated prtflis, an initial fee in respect f each segregated prtfli apprved: Where the creatin f the segregated prtfli is apprved n r befre 20 June US$100 Where the creatin f the segregated prtfli is apprved n r after 1 July US$50 DOCUMENTS REQUIRED TO BE KEPT AT MOSSACK FONSECA & CO. (B.V.I.) LTD. OFFICE, IN ACCORDANCE WITH THE LAW The fllwing infrmatin/dcuments are required t be kept at the Registered Agent

5 ffice. Same will nt be filed at the BVI Registry. Apprpriate due diligence dcuments, as required. Cpy f the Cnsent t Act letter signed by every persn that wuld be appinted as directr. Name, address and cpy f identificatin card f every persn that wuld be appinted as directr. Address where the riginal Register f Directrs and Register f Members are kept. Cmplete and updated cpy f the Register f Directrs and Register f Members must be kept at the Registered Agent's ffice. Adptin f crprate seal is mandatry. An impressin f same must be kept at the Registered Agent's ffice. SOCIAL AND ECONOMIC INDICATORS Lcatin: Caribbean (50 miles east f Puert Ric). Area: 50 islands cmprising 59 square miles, f which apprximately 15 are inhabited and the largest is Trtla, with 21 square miles. Ppulatin: 24,491 (latest 2009 est.). Climate: Trpical Official Language: English Gvernment: Ministerial Demcracy (clny f Great Britain) Living Standard: High Banking: Wrldwide banking facilities available Legal Tender: Currency f the United States f America (US$) Industry: Turism and financial services MOSSACK FONSECA & CO. (B.V.I.) LTD.

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