In June 2011, the Cayman Islands Government announced a proposal
to require registration of new and existing 'master funds'
in a traditional 'master/feeder' structure. The relevant
legislation was passed by the Legislative Assembly on 5 December
2011 and, as expected by Cayman industry professionals, the
registration and ongoing reporting requirements are not
In a typical 'master/feeder' structure, most of the
assets are held at the master fund level and the Cayman Islands
authorities have sought to respond to suggestions from various
international bodies to bring master funds under the aegis of the
Cayman Islands Monetary Authority's (CIMA) regulatory
Closed-ended funds and master funds that do not have Cayman
Islands regulated feeder funds investing in them are not subject to
the new registration requirements.
When does this take effect?
The legislation is currently awaiting approval by the Governor
but is expected to come into effect before the end of 2011.
New master funds (ie those set up after the law comes into
effect) will need to be registered straight away. Existing master
funds will have 90 days from the commencement date of the
legislation to make the necessary filing. This 90 day period might
be extended, but we recommend that registration be done before the
end of Q1 2012.
What needs to be done to register? There will
be no requirement for a master fund to have an offering document
but if a master fund does have an offering document, that will need
to be filed with CIMA along with a form containing prescribed
details (expected to be called an MF4 Form) and a registration fee
of CI$2,500/US$3,048. For those that do not have an offering
document, registration will be achieved simply by filing the MF4
Form and the registration fee. CIMA has not yet issued guidance on
what prescribed details will need to be included in the MF4 Form,
but we expect them to be similar to those that are required to be
filed in relation to regulated feeder funds. We hope that CIMA will
issue this guidance shortly.
What are a regulated master fund's ongoing
Each regulated master fund will be required to comply with the
same filing requirements that currently apply to regulated feeder
funds, (i) to pay an annual fee, (ii) to file audited financials
and a Financial Annual Return with CIMA within six months of its
financial year end and (iii) to notify CIMA of any changes to the
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Many people are baffled by trusts, the purpose of which they don't fully comprehend. Some even regard them with suspicion, as tools of of opaque tax evasion strategies of a type favoured by wealthy individuals.
We were recently instructed by a Bank in relation to a regulatory matter. The Bank had made a suspicious activity report to the Financial Investigation Unit ("FIU") due to their concerns about the potential source of funds in an account.
Many of us will have heard the recent claim by Donald Trump in the US presidential election that, if elected, he will ensure that a 1,000 mile border wall is constructed between the US and Mexico...
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).