Cayman Islands: Update: Cayman Islands Financial Account Reporting For Investment Funds

Last Updated: 23 December 2015
Article by Andrew Morehouse and Matt Taber

In our previous alert on this topic, we gave the background to the implementation of the Organisation for Economic Co-operation and Development (OECD) Common Reporting Standard for the exchange of tax information (CRS).  The Tax Information Authority (International Tax Compliance) (Common Reporting Standard) Regulations, 2015 (CRS Regulations) bring the CRS into Cayman Islands law with effect from 1 January 2016.

On 8 December 2015, the Cayman Islands Government issued an update that contains some important information for the managers, operators and administrators of Cayman Islands investment funds. This alert provides details of the update and some commentary on the impact for the Cayman Islands investment funds industry.


The highlights from the update are: 

  • New Self-Certification forms have been developed and issued.
  • Confirmation of CRS Participating Jurisdictions and a timely reminder that the United States is not participating in CRS.
  • Confirmation of the definition of the limited Cayman Islands Non-Reporting Financial Institutions.
  • Clarity on the timing for phasing out UK FATCA.
  • Information on potential Guidance Notes.
  • Timing for the next phase of the CRS Regulations.

New Self-Certification forms and fund subscription documents

The publication of new Cayman Islands self-certification forms by the Cayman Department of Tax Co-Operation (DITC) will be welcomed by all in the Cayman Islands investment funds industry and demonstrates the Cayman Islands' market leading approach to CRS and automatic account information sharing generally.

Those of us who have been dealing with new fund launches and fund updates have been grappling with what changes had to be made to funds' subscription documentation in order to allow them to harvest the right information for CRS.  These new forms can be used as is or modified and included into the relevant subscription agreement and questionnaires. 

The Entity Self-Certification form is 19 pages long, but has been re-written so that US, UK and CRS classifications are split and it also provides a section for the details of Controlling Persons (defined in the CRS) to be added which differentiates it from forms issued by other global players in this area.

Many Cayman Islands funds already obtain IRS W8 and W9 forms, which provide the information a fund needs to classify and report under the Tax Information Authority (International Tax Compliance) (United States of America) Regulations (Revised) (US FATCA), and have updated their subscription documents in the last 18 months to address reporting under the Tax Information Authority (International Tax Compliance) (United Kingdom) Regulations (Revised) (UK FATCA). 

It is important to note that there is a positive obligation on a fund to classify a new investor account within 90 days of the subscription date.  If a fund (most likely acting through its administrator) is not able to classify an account within 90 days then it must report it to the DITC. As a result funds should be reviewing their subscription documents and procedures with their administrators and Cayman Islands legal counsel right now to ensure that the right information is requested at the subscription stage to avoid having to seek further certifications from investors.

Participating Jurisdictions for CRS

95 jurisdictions are included in the first list of 'Participating Jurisdictions' published by the DITC.  The Cayman Islands has adopted what is known as the 'wider approach' which requires Financial Institutions (FIs) to collect data relating to the country of residence and tax information number for all non-residents, not just those that are in 'Reportable Jurisdictions', so that when those of the Participating Jurisdictions who are not yet Reportable Jurisdictions become Reportable Jurisdictions, Cayman FIs will have the information available to allow them to make those reports. This will alleviate future compliance burdens.

This listing provides a reminder that the US is a non-participating CRS jurisdiction and this has an impact on the Cayman Islands investment fund industry discussed below.

US FATCA and 'Investment Entities located in a Non-Participating Jurisdiction managed by a Financial Institution'

An important point to note for investment funds and the managers and administrators of those funds is that one key impact of the US being a non-participating jurisdiction for CRS purposes is that, in general, US feeder funds into a Cayman Islands master fund fall within the definition of Passive NFEs.  The result is that the Cayman Islands master fund must obtain information on the Controlling Persons of the US feeder. 

This will almost certainly come as a surprise to many US based managers and will need careful analysis of US feeder fund documentation to determine who the Controlling Persons are. In some cases, this will be the natural person who controls the investment manager, managing member or general partner of the US feeder, but could be investors in US feeders.

Non-Reporting Financial Institutions

For the purposes of the investment funds industry, there are essentially no non-reporting financial institutions (as there were under US FATCA and UK FATCA).

The future of UK FATCA

The UK has now indicated that the UK intergovernmental agreement for Crown Dependencies and Overseas Territories (of which the Cayman Islands is one) will operate alongside the CRS for 2016 and will be phased out in 2017, so that only the CRS will remain in place (alongside US FATCA).

The reporting options on the Cayman AEOI Portal are going to be clarified by the DITC in due course.

The key message here is that Cayman Islands investment funds should not amend their current policies and procedures with regard to UK FATCA, but should simply adopt additional policies and procedures to address CRS compliance. 

Will there be new Guidance Notes?

Although the DITC will publish some limited practical guidance notes in relation to aspects of CRS which are specific to the Cayman Islands, the key sources of information on the CRS are contained on the OECD's automatic exchange portal. 

Is this it for now?

Sadly no! The DITC was extremely keen to have the initial CRS Regulations adopted and published as soon as possible, but the result of this is that drafting for compliance and enforcement of the CRS and the CRS Regulations was postponed. It is now anticipated that amended CRS Regulations will be issued in Q1 2016.

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.

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.