Mutual Fund Services

Cayman Islands' Mutual Funds Law 2001

The Cayman Islands' Mutual Funds Law is designed to regulate mutual funds and mutual fund administrators in a manner that is consistent with commercial and legal practice in the islands. This law seeks to introduce a system that is reasonable, not overly expensive but well regulated.

A mutual fund must be licenced itself, unless:

• the administrator of the fund that provides the fund’s principal office is licenced; or

• the fund has not more than 15 investors; or

• the minimum equity interest purchasable is CI$40,000 (US$48,000) or more; or

• the equity interests are listed on a stock exchange.

A Mutual Fund Licence will only be granted directly to the fund when the promoter is a well-established reputable organisation. A Mutual Fund Administrators Licence will only be granted when the Cayman Islands Monetary Authority has satisfied itself as to the status and financial standing of the applicant. Primarily, the legislation is designed to ensure that the promoters, directors and managers of Cayman Islands Mutual Funds have sufficient expertise to administer such funds.

Offering documents must accurately describe the equity interests and must contain sufficient information to enable a prospective investor to make an informed decision on whether to subscribe for the equity interests. Equity interests are defined to mean a share, trust unit or partnership interest that carries entitlement to participate in the profits of the fund.