Cayman Islands Government and CIMA Announce Plans for Future Regulation of Cayman Islands Master Funds
The Cayman Islands Government has announced a proposal to register "master funds" in a "master/feeder" structure. Registration will be with the Cayman Islands Monetary Authority (CIMA), the jurisdiction's financial regulatory body. The proposal is subject to debate and approval by the Legislative Assembly of the Cayman Islands and no draft legislation has yet been presented.
As the leading jurisdiction for hedge funds, the Cayman Islands Government considers the registration of master funds to be a prudent and necessary step in hedge fund governance and is a logical extension of recent regulatory reports and initiatives worldwide in this area. It is expected that the registration obligation will apply only to "master funds" which already have an existing CIMA registered "feeder fund" as part of the structure and therefore the procedure for registering the master fund is expected to be straightforward and there should be no onerous reporting requirements.
The attached update provides the latest information on the new regulations. Maples and Calder will issue a further update once additional details are available from the Cayman Islands Government and CIMA.