Cayman Islands: Cayman Islands Establishing AIFMD Consistent Regimes

The Cayman Islands Government ("CIG") published two bills ("Bills") on 10 July 2015 which will establish two new "opt in" regulatory regimes for the Cayman Islands which are consistent with the Alternative Investment Fund Managers Directive ("AIFMD").

It is anticipated that the Bills will be approved by the Cayman Islands' Legislative Assembly during August 2015.

These new AIFMD consistent regulatory regimes (together, the "New AIFMD Regimes") will be of particular interest to managers and funds looking to access European investors, whether using existing national private placement regimes ("NPPRs") or looking to keep open the option of using an AIFMD passport at some point in the future.

For all other Cayman Islands based funds, and their managers, the fact that the New AIFMD Regimes are wholly optional means that the current Cayman Islands regulatory framework won't be affected and it will be business as usual.

ESMA Recommendation

Clients will be aware that the European Securities Markets Authority ("ESMA") is due to provide its recommendation to the European Commission ("EC") as to which non-EEA[1] jurisdictions should be eligible for a "third country passport" under AIFMD on 22 July 2015 (the "Initial Recommendation").

ESMA has decided to take a "country-by-country" approach to the extension of the passport and is likely to single out certain jurisdictions in the Initial Recommendation. Noting that ESMA currently has 44 jurisdictions (including the Cayman Islands and the USA) to consider it is unlikely that all can be covered by the Initial Recommendation and jurdisditions will instead be considered on a phased basis. We anticipate that additional advice and recommendations will be issued by ESMA to the EC shortly after the Initial Recommendation until the work on all 44 jurisdictions is complete.

Given the upcoming Initial Recommendation, clients will have been reassured to see that the CIG issued an Industry Advisory on 15 May 2015[2] confirming that CIG and the Cayman Islands Monetary Authority ("CIMA") had been working on, and were close to finalising, the New AIFMD Regimes. CIMA issued a related Statement on the same day.[3]

The publishing of the Bills is the next step in the process to implement the New AIFMD Regimes in the Cayman Islands.

European Commission Decision

The decision on extension of the passport to any third country rests with the EC rather than ESMA and the EC has discretion whether to accept ESMA's advice. The EC has three months from receipt of the Initial Recommendation to specify a date when rules relating to the third country passport should become effective for the jurisdiction(s) recommended by ESMA.

That timetable, which is set down by the AIFMD, would see an EC decision on the first non-EEA countries to have the AIFMD passport extended to them by October 2015 at the earliest.

New AIFMD Regimes

The Bill amending the Mutual Funds Law introduces the concept of an opt in designation as a "regulated EU Connected Fund" (the "EU Connected Fund Regime"). The EU Connected Fund Regime is available to any type of investment fund (whether open-ended or closed-ended) which: (i) is either managed from or marketed in a Member State of the EEA as contemplated under AIFMD and (ii) elects to fall within CIMA's new EU Connected Fund Regime.

The Bill amending the Securities Investment Business Law introduces the concept of an opt in designation as an "EU Connected Manager" (the "EU Connected Manager Regime"). The EU Connected Manager Regime is available to a person who: (i) falls within the existing scope of the Securities Investment Business Law; (ii) conducts management, marketing or depositary activities as contemplated under AIFMD; and (iii) elects to fall within CIMA's new EU Connected Manager Regime.

Under the New AIFMD Regimes, it is anticipated that regulated EU Connected Funds and EU Connected Managers will be able to opt in to new regulatory standards which are consistent with AIFMD. The Bills make clear that the existing supervisory duties and powers of CIMA under the Mutual Funds Law and Securities Investment Business Law will extend to regulated EU Connected Funds and EU Connected Managers which opt in to the New AIFMD Regimes.

The Bills anticipate that the detail of the New AIFMD Regimes will be provided in regulations issued pursuant to each of the Bills (together, the "Regulations"), which are expected to follow shortly.

How will NPPRs be Affected?

Clients will be aware that there is still uncertainty as to how the third country passport regime under AIFMD will work if and when extended to any one or more countries by the EC, and in particular it is unclear what the potential impact of any decision to extend the passport to third countries will have on the decision as to retention of the NPPRs.

The question as to what any such an extension will do to NPPRs, and whether any withdrawal of NPPRs will be on a blanket, or country by country, basis will hopefully be clarified by ESMA and/or the EC well in advance of the 2018 date set out in the AIFMD.

Cayman Well Placed for Extension

There has been long-standing reciprocity of access for EEA funds and managers to investors in the Cayman Islands.

The New AIFMD Regimes combined with this established reciprocity should place the Cayman Islands in a favourable position for consideration by ESMA and the EC and will, we anticipate, secure extension of the AIFMD passport to the Cayman Islands in relatively short order.

Is there action to be taken immediately?

Although there is no action to be taken now, clients with Cayman Islands funds and / or managers with an EEA nexus should look out for further Maples and Calder updates once the Regulations are issued, which we currently anticipate will be during August 2015.

[1] European Economic Area.



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

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
28 Apr 2016, Webinar, George Town, Cayman Islands

A topical discussion on recent updates covering some of the more frequently asked questions around FATCA and CRS.

29 Jun 2016, Webinar, George Town, Cayman Islands

This webcast focuses on the impact FATCA and CRS are having on structured finance vehicles set up in the BVI, Cayman Islands and Ireland and covers in detail the impending reporting and notification deadlines in each of these jurisdictions.

11 Aug 2016, Webinar, George Town, Cayman Islands

Our panel of experts will reflect on the impact of LLCs in the month since the first available registration date and discuss why the LLC was introduced and how it can be used to help our clients.

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”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.