Mutual Funds Exemption Removed: What Action Does Your Fund Need To Take?
Further to our previous update, the Mutual Funds (Amendment) Law, 2020 (“the Law”) was enacted and became effective February 7th 2020. The Law removes the previously existing exemption under Section 4 (4) from registration for hedge funds having 15 or less investors, where those investors have the power to appoint directors, GP etc. As a result, those entities, with greater than one but less than 15 investors, will cease to be exempt from the Mutual Funds Law and will be required to register with the Cayman Islands Monetary Authority (“CIMA”) in order to comply with the Mutual Funds Law in full.
What does this mean for previously exempt funds?
- Registration with CIMA under the Mutual Funds Law to be completed no later than August 7th 2020;
- Filing of annual audited accounts within six months of year end. The accounts must be signed off by a CIMA approved Cayman based auditor;
- Requirement to have a minimum of two Directors or Managing Members who must be registered with CIMA;
- Subject to review and oversight by CIMA going forward.
All new funds that were not conducting business prior to February 7th 2020 are required to register under the Mutual Funds Law.
Should you have any questions on the above implementation and timing please reach out to your usual DMS representative or contact us below: