CLIENT ALERT: Private Funds (Amendment) Law, 2020

The Private Funds Law, 2020 has recently been amended, resulting in an expanded definition of a ‘private fund’. You may need to consider if your entities are now in scope and required to register with CIMA. Deadline for registration is 7 August 2020.

The “four eyes” principle (applicable to open-ended funds) shall apply to Private Funds. A minimum of two (2) directors are required for applicants that are companies; and the minimum of two (2) director test will also apply to the general partner or corporate director, requiring that a minimum of two (2) natural persons be named in respect of a general partner or corporate director of a Private Fund.

We are seeing growing interest by large investment managers and institutional investors for independent oversight on private funds (common to hedge funds). Whilst investor demand has traditionally been a key driver for independent oversight, managers are seeing the benefits of using experienced directors with knowledge of Cayman laws and regulations, to help them navigate the rapidly evolving legal and regulatory landscape. This comes as CIMA’s powers to administer fines are extended to the Private Funds Law, 2020 (as revised).

Click below to learn more about the latest amendments.