Private Funds (Amendment) Act, 2026 (Act 6 of 2026)

Summary

This Act amends the Private Funds Act (2025 Revision) to create a specific regulatory regime for 'tokenised private funds' - private funds that represent investment interests using digital investment tokens. It adds definitions for 'digital investment token', 'partnership interest' and 'tokenised private fund', and inserts new sections 19A and 19B setting out registration, record-keeping, disclosure, transfer, and supervisory requirements specific to these funds.

The Act applies to private funds registered (or applying to register) with the Cayman Islands Monetary Authority (CIMA) whose investment interests are represented in whole by digital tokens, and to the operators of such funds. It layers additional obligations on top of the existing Private Funds Act requirements rather than replacing them.

Substantive requirements

• Record-keeping: Maintain and make available detailed records of token issuance, creation, sale, transfer and ownership.
• Annual confirmation: Confirm annually to CIMA that these records are properly kept.
• Transfer approval: Obtain operator approval for any transfer of a tokenised investment interest.
• Risk disclosure: Disclose token-specific risks (including cybersecurity and transferability) in the offering document and explain how those risks are mitigated.
• Characteristic restrictions: Comply with any characteristic restrictions CIMA imposes on the tokens.
• Periodic reporting: Comply with periodic reporting requirements.

CIMA is given express powers to request additional information, monitor ongoing compliance, and inspect the underlying technology and token transactions of tokenised private funds.

Key obligations

• A tokenised private fund applying for registration must apply to the Authority in the prescribed manner and comply with the conditions in new section 6(3).
• A tokenised private fund must obtain and securely maintain all records relating to the issuance, creation, sale, transfer and ownership of investment interests represented by digital investment tokens, including any additional information required by the Authority, and make these records available to the Authority (or a person it assigns) within the period the Authority specifies.
• The operator of a tokenised private fund must confirm annually to the Authority that all records relating to issuance, creation, sale, transfer and ownership of digital investment token interests have been properly kept and maintained.
• An investment interest represented by a digital investment token is only transferrable with the approval of the operator of the tokenised private fund, in accordance with the offering document.
• The tokenised private fund must disclose in its offering document any risks specific to the digital investment tokens, including cybersecurity and transferability risks and any other risks identified by the Authority.
• The offering document must set out how the identified digital investment token risks are addressed or mitigated for investors.
• Where the Authority imposes specific restrictions on the characteristics of a digital investment token, the tokenised private fund must ensure the token complies with those requirements.
• The tokenised private fund must comply with any periodic reporting requirement specified by the Authority.
• The tokenised private fund must provide any additional information the Authority requests to enable it to decide on an application.
• Tokenised private funds are subject to the Authority's supervisory powers, including inspections of underlying technology and digital investment token transactions.

Applies to

private funds, tokenised private funds, operators of tokenised private funds

Deadlines

• annually: Operator of a tokenised private fund must confirm annually to the Authority that records relating to digital investment tokens have been properly kept and maintained.
• within the period specified by the Authority: Tokenised private fund must make required records available to the Authority (or its assignee) within the period the Authority specifies.

Related documents

• This document amends Private Funds Act (2025 Revision)