Important Amendment to Cayman Private Funds Law

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On July 7, 2020 the Cayman Islands announced an amendment to the Private Funds Law 2020 to expand the definition of “Private Fund”. This amendment will increase the number and categories of closed-end Cayman investment vehicles required to register with the Cayman Islands Monetary Authority (CIMA).

 

The deadline for registrations continues to be August 7, 2020 for all closed-ended Cayman investment vehicles. Open-ended mutual funds and hedge funds are unaffected.

 

Expanded Definition of “Private Fund”

 

The expanded definition of Private Fund now includes any company, unit trust or partnership that offers, issues or has issued investment interests, the purpose of which is the pooling of investor funds with the aim of enabling investors to receive profits or gains from such entity’s acquisition, holding, management or disposal of investments, where:

 

  • The holders of the investment interests do not have day-to-day control over the acquisition, holding, management or disposal of the investments; and
  • The investments are managed as a whole by or on behalf of the operator of the private fund directly or indirectly.

 

Entities Now in Scope

 

Certain vehicles that may have previously been classified as out of scope may now be required to register with CIMA as private funds. These entities may include:

 

  • Vehicles set up to hold only a single investment
  • Co-investment vehicles
  • AIVs
  • Master funds

Entities Outside of the Scope

 

The following entities remain outside the scope of this definition:

 

  • Certain single investor vehicles
  • Mutual Funds such as open-ended hedge funds
  • Entities whose interests are held only by promoters, operators or by the founders, principals, owners or stakeholders of the entity
  • Securitisation special purpose vehicles, structured finance vehicles, debt issues and debt issuing vehicles, preferred equity financing vehicles
  • Sovereign wealth funds and single family offices
  • Joint ventures, proprietary vehicles, holding vehicles
  • Officer, manager or employee incentive, participation or compensation schemes, and programmes or schemes to similar effect
  • Individual investment management arrangements
  • Arrangements not operated by way of business 

 

How Apex Can Help

 

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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