The Private Funds Law 2020 and the Mutual Funds (Amendment) Law 2020 came into effect on 7 February 2020 in the Cayman Islands. Both laws introduce new regulation and we have put together a summary of what this means to you.
WHAT ARE THE CHANGES FOR PRIVATE FUNDS?
The Private Funds Law 2020 enforces that all closed-ended Cayman fund vehicles are required to register with Cayman Islands Monetary Authority (CIMA). Registration needs to happen within 21 days of accepting capital commitments from investors. Private Funds formed after 7 February 2020 must register no later than 7 August 2020.
WHAT ARE THE CHANGES FOR MUTUAL FUNDS?
The Mutual Funds Law 2020 enforces that investment funds where the equity interests in the fund are held by 15 or fewer investors are required to register with CIMA. These funds are also required to pay an annual registration fee and file documentation confirming the ability to appoint and remove the funds operator. Existing funds will need to comply with the Mutual Funds (Amendment) Law, 2020 by 7 August 2020.
ONGOING REQUIREMENTS FOR CAYMAN PRIVATE AND MUTUAL FUNDS
- Pay annual fee by 15 January each year
- File annual return with CIMA
- Annual audit by a CIMA approved audit firm within six months of the funds financial year end. Audit is required for first full year following registration so if 31 December then for year ended 31 December 2021
- Retain records in accordance with CIMA’s published rules
- Inform CIMA of any material changes to the information submitted in the registration application or offering documents within 21 days of any changes
The Private Funds Law 2020 also requires further services to be conducted by independent third party providers such as JTC. These additional services include:
- Asset valuations
- Safekeeping / custody of assets
- Cash monitoring
- Identification of securities
We at JTC can provide you with the above services to ensure you fully meet the new regulation requirements.