Introduction

When did this take effect?

What needs to be done to register?

What are a regulated master fund's ongoing obligations?

Introduction

In June 2011 the Cayman Islands government announced a proposal to require registration of new and existing master funds in a traditional master-feeder structure. The Legislative Assembly passed the relevant legislation on December 5 2011 and it came into force on December 22. As expected by Cayman industry professionals, the registration and ongoing reporting requirements are not onerous.

In a typical master-feeder structure, most of the assets are held at the master-fund level and the Cayman Islands authorities have sought to respond to suggestions from various international bodies to bring master funds under the aegis of the Cayman Islands Monetary Authority's (CIMA) regulatory framework. Closed-ended funds and master funds that do not have Cayman Islands regulated feeder funds investing in them are not subject to the new registration requirements.

When did this take effect?

The legislation came into effect on December 22 2011.

New master funds (ie, those set up after December 22) will need to be registered straight away. Existing master funds have 90 days from the commencement date of the legislation to make the necessary filing, and therefore need to be registered by March 21 2012.

What needs to be done to register?

A master fund that is caught by the legislation must file the following with CIMA:

  • an MF4 Form containing prescribed details; a copy of the master fund's offering document (only if there is already an offering document for the master fund – there is no requirement to have an offering document);
  • a certified copy of the certificate of registration or incorporation (as the case may be) of the relevant master fund; and
  • a registration fee of CI$2,500 (US$3,048).

What are a regulated master fund's ongoing obligations?

Each regulated master fund must comply with the same filing requirements as currently apply to regulated feeder funds, namely:

  • to pay an annual fee; to file audited financials and a financial annual return with CIMA within six months of the end of its financial year; and
  • to notify CIMA of any changes to the prescribed details or to the filed offering document (if there is one).

Previously published in Globe Business Publishing Ltd

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