The recent webinar Governance in Action: Cayman Regulatory Reminders and Best Practices featured four of our in-house experts sharing detailed guidance on current expectations for Cayman fund governance. The conversation highlighted the practical realities facing directors, fund operators, administrators, and compliance teams, and offered clear direction on strengthening oversight as regulatory standards continue to rise.
Implementing the Cayman governance framework
Rebecca Palmer opened with a clear overview of the Cayman corporate governance rules introduced in October 2023. Designed with flexibility, the framework requires every fund to adopt a governance approach that reflects its size, complexity, structure, and risk profile. She noted that some operators have yet to apply the rules in full, with documentation still a consistent weakness identified in regulatory thematic reviews.
Many funds now use a governance manual to demonstrate alignment with the rules, though smaller entities may rely on detailed board minutes or internal memoranda. Rebecca stressed that independence remains an integral expectation. While the rules do not mandate non-executive directors, appointing at least one independent director has become standard practice among managers seeking meaningful board challenge and objective oversight.
“Compiling a corporate governance manual that clearly demonstrates compliance with each part of the code has emerged as a best practice.” - Rebecca Palmer
Boards are expected to record how they review strategy, assess conflicts, oversee service providers, monitor risk, and keep policies up to date. Annual self-assessments, clear board agendas, and comprehensive minutes remain central to demonstrating effective governance.
Internal controls that support effective oversight
Rebecca also set out the internal control areas that require focused board attention. These include:
- Valuation processes and alignment with accounting frameworks
- Safekeeping of assets and custody oversight
- Cash management and signatory controls
- Escalation steps for NAV exceptions
She highlighted that while service providers play an important role, their work does not remove the board’s responsibility for supervision.
“It’s really important to remember that it’s not the responsibility of the fund administrator to be compliant with the AML framework. It’s the responsibility of the board of directors.” - Jude Hilton
Well-structured board packs, attendance from key service providers, and complete documentation all help boards show that oversight is not a formality but a consistent process.
Strengthening AML and CFT frameworks
Jude Hilton provided a detailed walkthrough of AML expectations. Every Cayman entity must appoint an AML Compliance Officer, a Money Laundering Reporting Officer, and a deputy, all of whom must be senior and independent. These individuals form the second line of defence and must have direct access to the board.
Jude underscored the importance of risk assessments aligned with the Cayman National Risk Assessment, sanctions screening, and oversight of outsourced CDD. She reminded attendees that boards remain fully accountable for AML compliance even when administrators perform operational checks. Clear escalation procedures, strong training, and independent AML audits are key elements of an effective framework.
Current regulatory themes and year-end focus
Anne Storie provided updates on regulatory developments, including the Cayman government’s continued focus on financial services, new measures aimed at addressing illicit finance, and recent amendments to the beneficial ownership regime. She also noted increased activity from the DITC as year-end approaches, including fines and penalties for missed or incorrect filings.
Anne reminded operators of important deadlines. These include:
- Financial statement filings
- Annual returns
- Economic substance notifications
- Updates within personal director regulatory portals
- Timely reporting of changes in directors and beneficial owners
Launch and closure considerations
Anne and Rebecca closed with practical guidance for fund launches and wind-downs. Launches require careful board composition, informed selection of service providers, readiness for operational due diligence, and early planning around bank account timelines. For closures, early engagement with directors, legal counsel, administrators, and auditors is essential. Clear timelines, appropriate holdbacks, and well-drafted resolutions help keep the wind-down process controlled and efficient.
Watch the full webinar on demand
This summary highlights the core themes, but the full webinar delivers a far richer discussion.
To hear the complete guidance from our specialists, including clear insights and deeper operational detail that extend beyond this overview, watch the full webinar on demand. It offers valuable direction for anyone responsible for Cayman governance, compliance, or fund oversight.
