12.2.2020

Cayman Islands Law Requires Registration

On February 7, the Cayman Islands Government passed sweeping legislation to enhance oversight of investment funds to boost best practices and strengthen investor confidence.  The Private Funds Law, 2020 requires private funds formed in Cayman to register with the Cayman Islands Monetary Authority (CIMA) within the next six months. The Mutual Funds Law, 2020 removed the small fund exemption (those with fewer than 15 investors) thereby subjecting substantially all private open ended and closed ended funds formed in Cayman to register with CIMA.  (For more insight, please see EisnerAmper’s previous report on the Cayman Islands’ enactment of legislative changes to enhance oversight of investment funds to boost best practices and strengthen investor confidence.)

Under the new laws:

• All impacted funds will be required to register by August 7, 2020;
• Any new funds launched from the effective date will require immediate registration.
• The registration fee for the initial registration of affected funds during the transition period will be waived; and
• The first audited accounts for registered funds will not be required to be filed with CIMA until six months following the first full financial year after registration.  Unlike other offshore jurisdictions that do not require local auditors, these audited financial statements must be submitted by a CIMA approved local auditor.

As always, for further instruction, please speak to your legal advisors.

By Elana Margulies-Snyderman

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