Updating the Mutual Funds Law in the Cayman Destinations
Cayman's mutual finance industry is proof of Darwin's theory that evolution takes place over very long periods. Admittedly it is taking years rather than millennia, however, the process of modernizing the legislation regulating Cayman's mutual fund industry appears to be a complex process.
Rapid growth in Cayman's hedge fund industry is the backdrop against that the current review of the regulatory regime is taking place. The number of cash registered or qualified with the Cayman Islands Monetary Authority (CIMA) has already been growing at a not possibly believable pace.
CIMA established a working group of representatives from the Cayman Islands Fund Administrators Relationship, the Cayman Islands Modern society of Professional Accountants, the Cayman Islands Law Society and the Cayman Destinations Bar Association to assess the advice of CIMA's own Policy and Analysis Division which has analyzed the regulation of the mutual funds industry.
The particular working group's Fire Extinguishers Edinburgh aim is to further enhance the legislation of the funds industry, with a view to striking a fair balance between the requirements of a competitive offshore financial centre and the international standards requested of a complex offshore financial centre by a number of international bodies.
It is likely that four, somewhat than two, categories of funds will be set up. The likely categories are a standard retail General public Fund offered to the public (no minimum subscription); Handled Private Fund with a certified Cayman fund officer providing the registered office (minimum subscription of US$10, 000); Recognised Fund with equity interests listed on a recommended stock exchange or licensed/registered in a recommended jurisdiction and Professional Account offered only to professional investors, with a high minimum subscription.
The name of Cayman's "Mutual Funds Law" has caused confusion, and so the working group proposes to call the amended Mutual Funds Regulation the "Investment Funds Law". Those who had trouble reconciling a hedge account as being a common fund must be able to accept a hedge fund is an investment fund.
Another suggestion of the working team, whilst not intended to save market participants money is likely to have that result, namely the proposal to provide broader powers to CIMA to waive the requirements for an audit for qualified or registered funds. Situations where a fund was not launched or where a fund is wound upwards with only a few investors are examples of where such a waiver may prove desirable.
The above mentioned is merely a flavour of the changes which is often expected, it is far from a complete set of all the likely implemented reconstructs. Timing of the implementation is difficult to predict, however the review process has been going on for years and it may conclude soon, although the new laws and regulations will need to be drafted and approved giving time to prepare for the new regulatory regime.
Previously Cayman's regulators have been able to achieve the delicate equilibrium, balancing between regulation and the requirements of the funds industry and they are intent on bettering further an offshore jurisdiction already in high demand. Their own hope is that the Cayman Islands will continue to be the natural selection of fund experts.
Rapid growth in Cayman's hedge fund industry is the backdrop against that the current review of the regulatory regime is taking place. The number of cash registered or qualified with the Cayman Islands Monetary Authority (CIMA) has already been growing at a not possibly believable pace.
CIMA established a working group of representatives from the Cayman Islands Fund Administrators Relationship, the Cayman Islands Modern society of Professional Accountants, the Cayman Islands Law Society and the Cayman Destinations Bar Association to assess the advice of CIMA's own Policy and Analysis Division which has analyzed the regulation of the mutual funds industry.
The particular working group's Fire Extinguishers Edinburgh aim is to further enhance the legislation of the funds industry, with a view to striking a fair balance between the requirements of a competitive offshore financial centre and the international standards requested of a complex offshore financial centre by a number of international bodies.
It is likely that four, somewhat than two, categories of funds will be set up. The likely categories are a standard retail General public Fund offered to the public (no minimum subscription); Handled Private Fund with a certified Cayman fund officer providing the registered office (minimum subscription of US$10, 000); Recognised Fund with equity interests listed on a recommended stock exchange or licensed/registered in a recommended jurisdiction and Professional Account offered only to professional investors, with a high minimum subscription.
The name of Cayman's "Mutual Funds Law" has caused confusion, and so the working group proposes to call the amended Mutual Funds Regulation the "Investment Funds Law". Those who had trouble reconciling a hedge account as being a common fund must be able to accept a hedge fund is an investment fund.
Another suggestion of the working team, whilst not intended to save market participants money is likely to have that result, namely the proposal to provide broader powers to CIMA to waive the requirements for an audit for qualified or registered funds. Situations where a fund was not launched or where a fund is wound upwards with only a few investors are examples of where such a waiver may prove desirable.
The above mentioned is merely a flavour of the changes which is often expected, it is far from a complete set of all the likely implemented reconstructs. Timing of the implementation is difficult to predict, however the review process has been going on for years and it may conclude soon, although the new laws and regulations will need to be drafted and approved giving time to prepare for the new regulatory regime.
Previously Cayman's regulators have been able to achieve the delicate equilibrium, balancing between regulation and the requirements of the funds industry and they are intent on bettering further an offshore jurisdiction already in high demand. Their own hope is that the Cayman Islands will continue to be the natural selection of fund experts.
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