Further to our previous updates in relation to the new Cayman Islands investment fund legislation, the Private Funds Law, 2020 was amended on 7 July 2020 and the definition of a private fund has changed.

Therefore, vehicles which were previously out of scope, may now in fact be required to register with the Cayman Islands Monetary Authority.

The key changes which have been made to the definition of a private fund under the Private Funds (Amendment) Law, 2020 are highlighted in bold below:

"private fund" means a company, unit trust or partnership whose principal business is the offering and issuing of its that offers or issues or has issued investment interests, the purpose or effect of which is the pooling of investor funds with the aim of spreading investment risks and enabling investors to receive profits or gains from such entity's acquisition, holding, management or disposal of investments, where —

(a) the holders of investment interests do not have day-to-day control over the acquisition, holding, management or disposal of the investments; and

(b) the investments are managed as a whole by or on behalf of the operator of the private fund, directly or indirectly, for reward based on the assets, profits or gains of the company, unit trust or partnership, but does not include —

(i) a person licensed under the Banks and Trust Companies Law (2020 Revision) or the Insurance Law, 2010;

(ii) a person registered under the Building Societies Law (2020 Revision) or the Friendly Societies Law (1998 Revision); or

(iii) any non-fund arrangements.

Please note that despite the above change the deadline to register funds which are in-scope remains 7 August 2020.

If you have any questions in relation to how this amendment may impact your Cayman Islands funds or if you would like assistance registering your fund, please contact us at caymanlegal@ocorian.com or via our profiles below to discuss next steps.

Originally published July 15, 2020.

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.