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Cayman Funds 2016

FOREWORD Cindy Scotland is the managing director of the Cayman Islands Monetary Authority. CAYMAN FUNDS | 2016 11 and/or market non-EU funds in the EU. The commission will consider whether the passport will be made available to the alternative investment managers from outside the EU on a voluntary opt-in basis. The Cayman Islands is currently undergoing such an assessment, having been included in the second round of countries being assessed by ESMA. CIMA has been holding ongoing discussions with ESMA to ensure that all stakeholders fully understand the expectations to enable the extension of the passport to the jurisdiction, and to also keep ESMA apprised of our progress in updating the relevant laws and regulations. The government has also made a commitment to maintaining this dialogue, with efforts being undertaken at the political level. The objective of these measures is to ensure that the Cayman Islands has a successful assessment that results in the extension of the passporting option to its funds and fund managers. Cayman funds that do not intend to raise capital in the European Economic Area (EEA), or are not managed by managers located within the EEA, will not be subject to these specifi c regulatory requirements. Enhancing internal processes AIFMD CIMA has signed Memoranda of Understanding with 27 EEA member state regulators which require that the authority exchanges information with respect to covered funds. As a result of these agreements, certain EU countries are now requesting that CIMA submit an additional attestation regarding its ability to regulate covered funds, including closed-ended funds, and to confi rm its ability to provide information, pursuant to these agreements, when required. Internal systems and processes—such as notifi cation forms, and formalisation of the process for issuing attestation letters—are also being updated to accommodate this new AIFMD regime. REEFS On January 5, 2015, entities regulated by CIMA were introduced to a new online system aimed at enhancing the ease of doing business with CIMA, as well as to increase internal effi ciency. The new system— the Regulatory Enhanced Electronic Forms Submission (REEFS)—is “The objective of these measures is to ensure that the Cayman Islands has a successful assessment that results in the extension of the passporting option to its funds and fund managers.” Shutterstock / Dmytro Balkhovitin an automated method for submissions of mandatory fi nancial returns, change requests and new licence applications. It is being implemented in phases. The new process was initially extended to insurance and fi duciary registrants and licensees. Funds, securities investment business entities and banking entities were next. One year on, REEFS is performing well. Currently, change request forms for existing insurance and fi duciary licensees are available online, as well as the Fund Annual Return (FAR) for funds. A new version of the FAR form has now been published. Directors can also register and make change requests online, as well as pay their fees electronically. Looking to the future Recently introduced legislation and amendments to existing legislation are expected to provide new opportunities for Cayman’s funds sector. Amendments to the SIBL included a new licensing category for entities that provide depositary services to EU funds. The AIFMD allows non-EU funds to have a depository in their country of domicile, which potentially provides an opportunity in the Cayman Islands to develop a new industry in the fi nancial services sector. The Limited Liability Companies (LLCs) Bill, 2015 was published in the Cayman Islands in 2015, and is expected to be enacted into law in early 2016. This legislation paves the way for the introduction of a new type of corporate vehicle in Cayman—the Cayman LLC. These measures are designed to help maintain the Cayman Islands as the leading global jurisdiction for fund formation. The outlook for the future remains positive.


Cayman Funds 2016
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