Registration deadline approaching fast: Cayman private funds and limited investor funds
21 May 2020
Recent legislation introduced in the Cayman Islands in February 2020 provided a six month transition period for the registration of vehicles classified as "private funds" or "limited investor funds". That transition period will expire on 7 August 2020.
Background – new registration requirements
Legislation was adopted by the Cayman Islands in February 2020 introducing registration requirements for:
- • certain closed-ended investment funds known as "private funds"1 ; and
- • those open-ended fund vehicles, known as "limited investor funds", which had previously been exempted from registration under the Mutual Funds Law (2020 Revision) (as amended, the Mutual Funds Law) because the fund's equity interests were held by 15 or fewer investors, a majority of whom had the power to appoint or remove the fund's operator2.
The Transition Period
Private funds and limited investor funds existing prior to 7 February 2020, as well as new private funds launched between 7 February 2020 and 6 August 2020, have until 7 August 2020 to register with the Cayman Islands Monetary Authority (CIMA) (the Transition Period). In contrast, any new limited investor funds established after 7 February 2020 were required to comply with the relevant registration requirements under the Mutual Funds Law upon launch.
Failure to register by 7 August 2020
Private funds and limited investor funds which fail to register with CIMA during the Transition Period will be operating in contravention of the Private Funds Law, 2020 (the Private Funds Law) or the Mutual Funds Law, as applicable, leading to a risk of investigation by CIMA and subsequent enforcement action.
For advice on whether your fund vehicle(s) need to register under the Private Funds Law or the Mutual Funds Law, or for assistance with a registration, please contact your usual Mourant contact or, alternatively, please get in touch with one of the contacts on this page.