Mutual Fund Services

Definition of a Cayman Islands' Mutual Fund

A mutual fund under this law is defined as a company, unit trust or limited partnership that issues equity interests, designed for the purpose of pooling the assets of the investors in order to spread investment risk and generate profits or gains for those investors. The equity interest must be redeemable at the option of the investor. Debt issues, structured financing transactions and capital markets are excluded.

Cayman Islands' mutual funds may be open-ended or close-ended. Open-ended funds will have the power to redeem or buy back its shares, while a close-ended fund will either have no redemption or repurchase rights or only restricted rights. A close-ended fund will be used when the underlying assets of the fund cannot be readily realised or liquidated. A close-ended fund is not actually defined as a ‘mutual fund’ in the Mutual Funds Law and therefore falls outside of the licencing regulations.