On 8 January 2020, the Mutual Funds (Amendment) Bill, 2020 was
published (the "Bill"). We expect the
Bill will become law by the end of January 2020.
The Bill amends the Mutual Funds Law to remove the 'fifteen
investor exemption', which permits funds with fifteen or fewer
investors to avoid registration as a mutual fund, subject to
certain conditions.
Funds currently relying on the fifteen investor exemption will
therefore need to register with the Cayman Islands Monetary
Authority ("CIMA") in due course,
although the timing by which they will need to do so has not yet
been confirmed. Where these funds have master funds established in
the Cayman Islands, these master funds may also be required to
register with CIMA.
Directors of registered mutual funds are required to be
individually registered or licensed under the Director Registration
and Licensing Law.
For further information about the consequences of being a
registered mutual fund for the fund and its directors, please see
the following Client Memoranda:
- Ongoing Obligations of Exempted Companies Registered as Mutual Funds
- Ongoing Obligations of Exempted Limited Partnerships Registered as Mutual Funds
- The Directors Registration and Licensing Law
If you manage or operate a fund that is currently relying on the fifteen investor exemption, or if you have any other questions, please do get in touch with your usual Walkers contacts to discuss the next steps.