Update on Reporting Requirements for Cayman Investment Funds

On February 7, 2020, The Cayman Islands Government published the Cayman Islands Private Funds Law 2020 and Mutual Funds (Amendment) Law, 2020.  These respective laws will establish the regulatory framework for alternative investment funds meeting the definition of “private funds” and enhance the regulatory supervisory framework for open-ended mutual funds.

Private Funds

Private Funds are closed-ended fund vehicles that accept capital commitments from investors.  These funds:

  • Must now apply for registration with the Cayman Islands Monetary Authority (CIMA) within 21 days of accepting capital commitments for investors.
  • Must be registered prior to accepting capital contributions from investors.
  • Must comply with annual audit and return requirements. Annual audits must be performed by a CIMA-approved local auditor.
  • Must comply with certain obligations in relation to valuation of investments, safekeeping of fund assets, and monitoring and identification of securities.

CIMA as indicated that a copy of the marketing materials, summary of terms, or offering document will be required to be filed upon registration.  An initial application for registration should be accompanied by a fee of $366.  Private Funds will be subject to an ongoing annual registration fee of $4,268.  Funds registering during the period from February 7, 2020, through August 7, 2020, will not pay the annual registration fee for 2020. All new and existing private funds will need to comply with the Private Funds Law, 2020 by August 7, 2020.

Mutual Funds

The most significant change included in the Mutual Funds (Amendment) Law 2020 is the removal of the exemption for funds with less than fifteen investors.  These funds will now be required to register with CIMA and pay an initial application fee of $368 and an annual registration fee of $4,268.  Similar to Private Funds, the annual fee for 2020 is waived for those funds registering between February 7, 2020, and August 7, 2020.  These funds will now be required to file an annual return with CIMA and have the funds financial statements audited by a CIMA approved auditor.  All formerly exempt funds now subject to registration under the Mutual Funds (Amendment) Law 2020 will need to register by August 7, 2020.  All new funds with less than fifteen investors will need to comply with the law immediately.

 We Can Help

Our Elliott Davis Cayman team has extensive experience to provide you with guidance and support through this process. We are committed to working with you to ensure that your funds meet these new requirements in a timely manner.