Update on Cayman Islands Private Funds Law and Regulation

Registration and Timing

The sponsors and operators of private funds established in the Cayman Islands should by now be well on their way to completing the classification of their entities and to registering those entities that are required to be registered with the Cayman Islands Monetary Authority (“CIMA”) under the Private Funds Law, 2020 (the “PFL”). The formal deadline for applications to be filed is 7 August 2020. However, many lenders under capital call facilities insist that applications for registration be filed well in advance of that deadline.

Once registered, private funds will be required to pay an annual fee to CIMA, and to file their audited accounts and a fund annual return (“FAR”) within six months of each financial year-end following registration (starting with the financial year that ends in 2020).

For a reminder of which entities are affected and required to register, and which are not, please click here.


Contents of Marketing Materials

In exercise of its authority under the Monetary Authority Law (as amended), CIMA has published rules for the contents of marketing materials inviting investment in private funds registered under the PFL. The rules are largely a reiteration of best practice, though they do require the addition of language confirming that CIMA assumes no liability for the performance or creditworthiness of the private fund, nor for the veracity of the information contained in the marketing materials.

The rules recognise that certain private funds do not prepare marketing materials, and do not require them to do so.

When preparing marketing materials, fund sponsors and counsel should be cognisant of the requirement to make certain disclosures relating to the discharge by the private fund of its obligations under the PFL in relation to the valuation and custody of assets, and cash-flow management. Walkers will, of course, also address these requirements when reviewing the relevant materials.

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CAYMAN ISLANDS
Ingrid Pierce Global Managing PartnerT +1 345 814 4667ingrid.pierce@walkersglobal.com
Tim BuckleyManaging PartnerT +1 345 814 4646 tim.buckley@walkersglobal.com
Bicrom DasPartnerT +1 345 814 4606bicrom.das@walkersglobal.com
Caroline HealPartnerT +1 345 814 4621caroline.heal@walkersglobal.com
Rolf LindsayPartnerT +1 345 914 6307rolf.lindsay@walkersglobal.com
Ed PearsonPartnerT +1 345 814 4528 ed.pearson@walkersglobal.com
Caroline WilliamsPartnerT +1 345 914 6342caroline.williams@walkersglobal.com

DUBAI
Daniel WoodManaging PartnerT +971 4 363 7912daniel.wood@walkersglobal.com

HONG KONG
Denise WongPartnerT +852 2596 3303denise.wong@walkersglobal.com

LONDON
Hughie WongPartnerT +44 (0)20 7220 4982hughie.wong@walkersglobal.com

SINGAPORE
Thomas GrangerPartnerT +65 6603 1694thomas.granger@walkersglobal.com