Cayman Registered Fund

Introduction

The Cayman Islands Monetary Authority (CIMA) regulates mutual funds under the Mutual Funds Law (Revised 2019). This Act sets out the guidelines pertaining to the application and licensing of mutual funds and other collective investment entities in Cayman.

About a Cayman Registered Fund

Registered mutual fund is a fund that meets criteria under Section 4(3) of the Mutual Fund Laws. This is the most common type of investment fund registered with CIMA. Registered mutual funds are exempt from the requirement to be licensed or administered locally on the basis that either

• each investor must subscribe for equity interests in an amount not less than US$100,000 or
• the equity interests of the fund are listed on a stock exchange recognized by CIMA.

Legal Requirements

Categories

Applicable legislation

Mutual Funds Law (Revised 2019)

Supervising Authority

Cayman Islands Monetary Authority (CIMA)

Corporate vehicle permitted

• Exempted Company
• Segregated Portfolio Company
• Unit Trust
• Exempted Limited Partnership

Share capital or equivalent

Minimum subscription - USD 100,000 by each investor Minimum investors - none

Directors / Partners / Trustees




Investment manager

• A BVI domiciled investment manager can either be licensed under Part I of SIBA or be approved under the Investment Business (Approved Managers) Regulations, 2012 as amended (the “AMR”).
• If the Investment Manager is licensed under SIBA, the professional fund has to obtain a license Category 3, sub-category B (and possibly E). Under this regime each director, shareholder (holding a significant interest of 10%) and officer of the person seeking a license must satisfy the FSC’s fit and proper criteria. The application also requires a detailed business plan. Multiple ongoing requirements are in place, such as the appointment of an anti-money laundering reporting officer and compliance officer, appropriate compliance systems and controls, the preparation of financial statements in accordance with certain accounting standards and the appointment of an authorized representative.
• If licensed under the AMR which is a lighter regulation and licensing process whereby the manager may carry on business 7 days after submitting the application form to the FSC, without having to wait for the outcome. After being approved under the AMR, an approved investment manager may serve an unlimited number of professional funds recognized under SIBA, being restricted only by the amount of aggregated assets under management, which for open-ended funds cannot exceed USD 400 million. An approved manager may also manage funds domiciled outside of the BVI, provided that these funds will meet similar criteria as private funds.
• An approved manager must appoint an anti-money laundering reporting officer.

Ongoing Obligations

• Licenses are to be renewed annually after the date of registration. On application for renewal of a Licence, the Bermuda Monetary Authority , if satisfied that the applicant is a licensee of good standing, may grant the renewal on payment by the applicant of the annual renewal Licence fee
• Filing of Audited Accounts: The licensee shall for the financial year beginning on the day on which it commences to carry on securities business; and for each subsequent year submit to the authority, within ninety days after the end of the financial year, audited financial statements prepared in accordance with international accounting standards, and which contain such additional information as may be prescribed.
• The Licensee must maintain appropriate policies of insurance for the purpose of indemnifying such licensee against any liability that may be incurred as a result of any act or omission by the licensee or any of its officers or employees in the conduct of the licensee’s securities business.