Legal Updates

 Asset Management and Investment FundsFebruary 13, 2020

Regulation of Closed Ended Cayman Funds

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For further information on any of the issues discussed in this publication please contact the related contact(s) on this page.

The Cayman Islands Private Funds Law, 2020 (the “Law”) was enacted on 7 February 2020 and requires that certain closed ended funds should be registered with the Cayman Islands Monetary Authority (“CIMA”) by 7 August 2020. As part of that registration process such funds will need to provide prescribed information to CIMA which is likely to include the categories of their target investors and assets. Once registered these funds will be subject to ongoing risk based monitoring on the basis of their risk profiles as assessed by CIMA and will be required to:

  • make annual filings including filing of audited accounts;
  • value their assets in accordance with accounting principles of non-high risk jurisdictions (unless exempted);
  • appoint a custodian or other specified party to hold and verify title to certain assets;
  • appoint an administrator or other specified party to monitor cash flows; and
  • keep records of the identification codes of certain assets which they hold or trade.

Who is Affected by the Law?

The Law applies to any “Private Fund” defined as any company, LLC, unit trust or partnership established in any jurisdiction:

  • whose principal business is the offering and issuing of interests that carry an entitlement to participate in its profits or gains;
  • the purpose or effect of which is the pooling of investor funds with the aim of spreading investment risks and enabling investors to receive profits or gains from its investments;
  • whose investors do not have day-to-day control over the management of its investments;

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DISCLAIMER: This document is for information purposes only and does not purport to represent legal advice. If you have any queries or would like further information relating to any of the above matters, please refer to the contacts above or your usual contact in Dillon Eustace.

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