Dear Clients and Colleagues,
On February 7, 2020, the Cayman Islands enacted new legislation, the Cayman Islands Private Funds Law, which applies to all investments funds incorporated in the Cayman Islands.
Below is an overview of the main implications of the new law on investment funds:
- Any Cayman Islands incorporated fund is required to register with the Cayman Islands Monitory Authority ("CIMA") until August 7, 2020. Any fund formed after August 7, 2020 will need to register with CIMA within 21 days of accepting capital commitments and prior to accepting contributions.
- No registration fee will be payable to CIMA for registration of private funds (which are not open ended funds) before August 7, 2020, but an annual fee will be payable to CIMA in January of each following year after their registration. No information on fees has yet been released.
- A closed-ended fund registered with CIMA will be required to file annual audited financial statements with CIMA (approved by a Cayman Islands-based auditor) for its first full financial year following its registration with CIMA and for each financial year thereafter. Closed-ended funds (unlike open ended funds) will not be required to file private offering memorandums (PPM) with CIMA.
- Closed-ended funds registered with CIMA will be required to nominate officers supervising the fund's management and operation, such as monitoring the fund's financial affairs and external valuation performed by the fund. Funds may either nominate external service providers or use employees of the fund or of its management entities to perform such functions, provided that suitable risk disclosures are included in the fund's documents or suitable notifications are sent to the fund's investors.
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