Cayman Regulatory Developments: GAIMOps Connect 2020 Re-cap

Understanding the Cayman regulatory landscape and having experienced Cayman directors to guide you is an important part of operating your Cayman investment fund. In the recent GAIMOps Connect virtual conference, our Director and General Counsel Sabrina Foster explored some of the recent Cayman regulatory developments with panelists from the Cayman Islands Monetary Authority (CIMA), Alternative Investment Management Association (AIMA) and Ogier. For those who missed it, see below some of the key takeaways from the discussion.

  1. Fund operators need to be aware of the obligations (and liabilities for non-compliance) in operating Cayman investment funds, including registered private funds under the supervision of the CIMA.
  2. Investors and allocators will be interested in knowing how asset managers and fund operators are managing and mitigating Cayman regulatory risk.
  3. Cayman’s approach to regulation is a ‘fund approach’ vs. a ‘manager approach’ (i.e. managers are not generally based in Cayman and so not subject to Cayman regulation, however, the investment funds are registered here, hence Cayman regulation of the investment fund.
  4. Cayman takes a risk-based approach to AML and CTF and there is greater obligation on compliance officers and fund operators (and this includes fund directors) following the introduction of Cayman’s administrative fines regime.
  5. Do not underestimate the value that experienced Cayman based independent directors can bring to your governance and internal controls framework in managing, and mitigating against, Cayman regulatory risk.
  6. As the global movement towards tax transparency continues to evolve, global industry bodies (such as AIMA) play an integral part in ensuring that different jurisdictions are not being forced out of step with other jurisdictions. AIMA and AIMA Cayman are key contributors to Cayman’s continued success as a leading offshore financial centre.