Cayman Islands: Obtaining A Mutual Fund Administration Licence In The Cayman Islands

Last Updated: 14 May 2017
Article by Harneys  


This guide sets out the requirements for a Cayman Islands company to apply to the Cayman Islands Monetary Authority (CIMA) for a Mutual Fund Administrator license under the Mutual Funds Law (the MF Law).

Licensing background

The MF Law provides that a person shall not act or carry on business (either in or from Cayman or as a Cayman registered entity conducting mutual funds administration outside Cayman) as a mutual fund administrator unless they have obtained a mutual fund administrators licence (Licence). There are severe penalties ranging from CI$20,000 to CI$100,000 (equivalent to US$24,390 to US$121,951) for carrying on any licensable activity without a licence or breach of any conditions of a Licence.

"Mutual Fund Administration" is defined as managing (including to control all or substantially all of the assets of a mutual fund) or administering a mutual fund, providing a 'principal office' within Cayman or to act as a director (company), general partner (partnership), trustee (trust) to or manager (limited liability company) of any mutual fund. A mutual fund is defined as a collective investment vehicle issuing redeemable equity interests, with some limited exceptions.

Licensing requirements and procedure

The information required for a Licence application is contained in the Mutual Fund Administrators Licence (Applications) Regulations (the Regulations). The types of licence are:

  • Full Administrator: must have a principal office in Cayman and can undertake administration services for an unlimited number of regulated mutual funds (a Full Licence).
  • Restricted Administrator: must have a registered office in Cayman and can provide services only in respect of regulated mutual funds specified in the Licence and must receive approval from CIMA for each fund for which they provide administration (a Restricted Licence).

All Licence applications must include the following information about the applicant:

  • name and registered office in Cayman;
  • satisfactory evidence that the applicant:
    • has sufficient expertise to administer regulated mutual funds; and
    • will be administered by persons who are fit and proper persons to be directors, managers or officers; and
  • evidence of incorporation and copies of constitutional or governing documents.

In addition to these basic requirements, applications for a Full Licence must also include:

  • details of principal office in Cayman;
  • names and addresses of two individuals or bodies corporate resident or incorporated in Cayman to be its agent (see below); and
  • evidence of a net worth of at least CI$400,000 (approx. US$500,000), unless CIMA is otherwise satisfied of the applicant's financial viability.

CIMA has also published a statement of guidance "Licensing - Mutual Fund Administrator" that provides general information relevant to applicants.

It takes approximately four to six weeks to obtain a Mutual Fund Administrator Licence once CIMA receives all required documentation. A Licence may be issued subject to conditions.

Where a licensed Mutual Fund Administrator is a company, unless listed on a recognised stock exchange, the company shall not issue equity interests, and a person owning or having an equity interest in the company shall not transfer, dispose of or deal with that interest, unless CIMA's prior permission has been obtained. If the company is listed, then it must notify CIMA of any changes in control, and the transfer of more than 10% of shares.

Licensing and annual fees 1

The application fee and initial annual fee are payable at the time the formal application is submitted.

Continuing obligations

Once it has obtained a licence, the licensed Mutual Fund Administrator must not provide regulated mutual fund administration services unless it has satisfied itself that:

  • each promoter of the mutual fund is of sound reputation;
  • the administration of the mutual fund will be undertaken by persons who have sufficient expertise to administer the mutual fund and are of sound reputation;
  • the business of the mutual fund and any offer of equity interests in it will be carried out in a proper way; and
  • the mutual fund, if it is not incorporated or established in Cayman, is incorporated or established in a country or territory approved by CIMA or is otherwise regulated by CIMA.

If a licensed Mutual Fund Administrator knows or has any reason to believe that a regulated mutual fund for which it provides any services:

  • is or is likely to become unable to meet its obligations as they fall due;
  • is carrying on business otherwise than in accordance with the Law or any other law; or
  • is carrying on business in a manner that is or is likely to be prejudicial to investors or creditors of the mutual fund,

then that licensee must immediately inform CIMA in writing. In addition, a licensed Mutual Fund Administrator must:

  • submit audited financial statements to CIMA;
  • obtain CIMA's written approval prior to the appointment of any director, manager, general partner or senior officer; and
  • if a company, shall at all times, have at least two directors (or two managers if it is an LLC).


1. As at April 2017

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.

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