Most Read Contributor in Cayman Islands, September 2016
The European Securities and Markets Authority (ESMA) today
issued further advice to the European Parliament regarding the
application of the Alternative Investment Fund Managers Directive
(AIFMD) passport to non-EU alternative investment fund managers and
alternative investment funds.
In its commentary ESMA noted that at this time, it could not
give definitive advice in relation to extending the passport to the
Cayman Islands, as Cayman is in the process of implementing its new
regulatory regimes. However, while it did not provide definitive
advice, ESMA acknowledged that Cayman has frameworks in place to
address systemic risks.
This includes legislative amendments passed in August 2015 that
established an opt-in regime for regulating Cayman-domiciled
investment funds and managers connected to the European Union
Cayman's investment funds currently are marketed in the EU
under national private placement regimes (NPPRs). The NPPR and
passport regimes will coexist until at least 2018, by which time
ESMA will have decided, and acted upon, whether or not the passport
regime should entirely displace NPPRs.
Commenting on ESMA's advice, Minister of Financial Services
Wayne Panton explained that rather than being 12 to 18 months away
from completing Cayman's AIFMD regime, the jurisdiction
actually is a few short months away from finalisation.
'The 12- to 18-month timeframe was given last year, as part
of the Cayman Islands Monetary Authority's (CIMA's) initial
submissions to ESMA', he noted.
In its current advice, ESMA remarked that CIMA is developing and
implementing a macro-prudential policy framework that would enhance
its current systemic risk monitoring.
It also stated that it will continue to work on its assessment
of other non-EU countries not covered in this advice with a view to
delivering further submissions to the European Parliament, the
Council and the Commission.
Furthermore, ESMA reiterated that prior to activating the
relevant provision in the AIFMD extending the passport to these
jurisdictions, the European Commission, Parliament and Council may
wish to consider waiting until ESMA has delivered positive advice
on a sufficient number of non-EU countries, before introducing the
passport in order to avoid any adverse market impact that a
decision to extend the passport to only a few non-EU countries
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