Are you ready for the Cayman Private Funds Law deadline?

The 7^th August deadline for the Cayman Private Funds Law is fast approaching. Since we explored what the legislative and regulatory changes meant for private funds in our article earlier this year, the Cayman Islands Government has now passed an amendment to the Private Funds Law to clarify which entities are impacted.

There are two pieces of legislation impacted – the Mutual Funds (Amendment) Law, 2020, and the Investment Funds (Private Funds) Bill, 2020 (the “Private Funds Law”). The amendments introduce regulation for previously unregulated private funds by placing them under the jurisdiction of the Cayman Islands Monetary Authority (“CIMA”). The goal is to implement prudential supervision to further enhance the country’s anti-money laundering laws.

What are the new requirements?

Registration with the Cayman Islands Monetary Authority (CIMA): Deadline 7 August 2020.
Annual Audit Requirement: A Private Fund will have its accounts audited annually by an auditor approved by CIMA and signed off by their Cayman office.
Compliance with the four eyes principle: A minimum of two directors are required for applicants that are companies, and a minimum of two natural persons are to be named.
AML Officers registered with CIMA: AML Officers must be named in the registration process and will the contact point for any queries relating to Anti-Money Laundering, Combating the Financing of Terrorism, etc.
Demonstrated compliance: With safe-keeping, cash-monitoring and valuation of securities requirements. These can be satisfied by the manager or an appointed Third Party.

Key dates for funds:

7 August 2020: All Private Funds, whether formed before or after the passage of the Private Funds Law, must register with CIMA by this date.
30 June 2021: All Private Funds must file financial statements audited by a CIMA approved auditor by this date.

Speak with our team

Mainstream’s experienced financial specialists have the expert know-how to implement these new regulatory and reporting requirements. Contact a Mainstream specialist today to learn more about how these changes will impact private funds and how we can help.

Important Disclosure

This article is not intended to be financial advice and is of a general nature only that does not take into account your individual objectives, financial situation or needs. While all efforts have been made to ensure the information contained in this article is accurate, errors may occur.

Sources

Changes to Cayman Islands’ private funds legislation in 2020, Mainstream: