Mutual Funds and Private Funds Bill 2020

On 8 January 2020, the Cayman Islands Government issued the Mutual Funds (Amendment) Bill, 2020 and Private Funds Bill, 2020.

The Bills have not yet been passed into law and are expected to be considered by the Legislative Assembly in the Cayman Islands later this month.

Once passed into law, the Bills will bring exempted funds and closed-ended funds into the regulatory regime in Cayman and require such funds to be registered with the Cayman Islands Monetary Authority (“CIMA”).

The Mutual Funds Bill removes the current exemption from registration for mutual funds with 15 or less investors, who have the power to appoint the operators of the fund.

The Private Funds Bill will create a new regulatory regime for closed-end funds (i.e. private equity funds), which is expected to be similar to the existing regime for mutual funds, which at a high level includes:

1. Registration with CIMA;
2. Annual audit requirements;
3. Requirements around conflicts of interest related to valuation, safekeeping, title verification and cash monitoring (if not outsourced); and
4. CIMA enforcement powers.

We will provide a further update on timing and requirements once the Bills become law. It is expected that supporting regulations and guidance will also be issued in due course. Please contact your usual attorney at Stuarts for more information.