The New Cayman Islands Private Funds Law

As previously reported in our Regulatory Update, the Cayman Islands has recently introduced legislative changes to enhance the oversight of open and closed-end funds to provide additional transparency for investors.

The Private Funds Law (2020) requires private closed-end funds to apply for registration with the Cayman Island Monetary Authority (CIMA), and the amendments to the Mutual Funds Law (2020) requires hedge funds with 15 or less investors to apply for registration with CIMA as well. The new regulations require all impacted funds to register by August 7, 2020.

The following obligations apply to both private funds and mutual funds affected by the regulations:

• Registration of all funds by August 7, 2020
• Annual fee payable to CIMA each year;
• Filing of an annual return with CIMA;
• Filing of audited accounts annually by a CIMA approved Cayman-based auditor
• Filing with CIMA within 6 months of the fund’s financial year end
• Retain records in accordance with CIMA’s published rules, guidance and policies, and
• Notify CIMA of any material changes to the fund’s offering document or other information submitted to CIMA in the registration application, within 21 days of making the change.

Private Funds also have new obligations regarding asset valuations, safekeeping of assets and title verification, cash monitoring and identification of securities (if applicable). An independent third party, such as a fund administrator, must conduct asset valuations safekeeping and cash monitoring. These obligations can be fulfilled by the fund’s GP provided that the person(s) performing the functions are independent from the portfolio management function or the potential conflicts of interest are identified, managed, monitored and disclosed to investors. 

How can Apex help?

As a full service fund administrator Apex can perform the independent functions regarding asset valuations, safekeeping of assets, title verification, cash monitoring and securities identification. In addition, Apex can also provide transfer agency and AML Officer services, loan administration, cash management, preparation of financial statement and full audit support as well as custody and depository services.

Apex Cayman can make registrations with CIMA on behalf of both private funds and hedge funds through our Registered Office Services, which include:

• Providing a registered office or business address for a company.
• Providing an accommodation, correspondence or administrative address for a company or for any other person.
• Filing statutory forms, resolutions, annual returns and notices.
• Maintenance of the minute book of a company, to include copies of the certificate of incorporation, board resolutions shareholder resolutions the memorandum and articles of associate of a company and other constitutional documents.

As a global financial services provider, Apex provides a single-source solution to providing independent fund administration, annual financial reporting and safekeeping of assets and custody services.

For more information on our services, Contact Us today.

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