Mutual Funds (EU Connected Fund (Alternative Investment Fund Managers Directive)) Regulations, 2016

Summary

These 2016 Regulations, made under the Mutual Funds Law (2015 Revision), set out the specific information and fees that 'EU Connected Funds' must submit to the Cayman Islands Monetary Authority (CIMA) in connection with marketing under the EU Alternative Investment Fund Managers Directive (AIFMD) national private placement regime. An EU Connected Fund is essentially a Cayman fund being marketed into the EU under AIFMD arrangements, whether or not it is itself a regulated mutual fund under Cayman law.

The Regulations distinguish between EU Connected Funds that are regulated mutual funds (including those electing registration under section 22B of the Mutual Funds Law) and those that are not regulated. Each category must submit prescribed particulars to CIMA, along with a CI$100 fee.

• Prescribed particulars: Member States of marketing, dates marketing began or is expected to begin, competent authorities involved, manager and administrator details, registered office, Cayman legal counsel, and a declaration of compliance with the relevant Member State's laws.
• Ongoing notification duties: Funds must notify CIMA of relevant changes on an ongoing basis.
• Annual confirmation: An annual confirmation/declaration requirement tied to the fund's financial year end.
• Duty to cooperate: A general duty to cooperate with CIMA information requests.
• Attestation fee: A fee applies for obtaining a formal attestation of status.
• Non-compliance: Non-compliance with the core submission and notification obligations is made a criminal offence carrying a fine.

The Regulations apply to any EU Connected Fund marketed, or expected to be marketed, into EU Member States under AIFMD private placement, regardless of whether the fund is a regulated Cayman mutual fund. They came into force immediately after the Mutual Funds (Amendment) Law, 2015 came into force.

Key obligations

• An EU Connected Fund that is a regulated mutual fund must submit to CIMA the Member State(s) of marketing, the date marketing commenced or is expected to commence, the relevant competent authority, the manager's name/contact details and country of authorisation, a declaration of compliance with the Member State's laws, and a fee of CI$100 (regulation 2).
• An EU Connected Fund that is not a regulated mutual fund must submit to CIMA a fuller set of particulars including the fund's name and type, reasons it is not required to be regulated, operator/administrator details, registered office, Cayman Islands legal counsel details, Member State(s) and dates of marketing, competent authority details, manager details, a compliance declaration, and a fee of CI$100 (regulation 3).
• An EU Connected Fund must notify CIMA within 21 days of the date marketing ceased in all Member States (regulation 4(a)).
• An EU Connected Fund must notify CIMA of any change to information previously submitted under regulation 2 or 3 within 21 days of the date of the change (regulation 4(b)).
• Within six months after the end of its financial year, an EU Connected Fund must submit written confirmation that the previously filed information has not changed and a declaration that it continues to be marketed in each Member State in accordance with applicable law (regulation 5).
• An EU Connected Fund must, at all times when requested by CIMA, provide all information necessary for CIMA to be satisfied the fund is being marketed lawfully in each Member State (regulation 6).
• An EU Connected Fund requesting an attestation or confirmation of status under section 22G of the Mutual Funds Law must submit written confirmation that its previously filed information is unchanged and pay a fee of CI$800 (regulation 7).
• Failure to comply with regulations 2, 3 or 4 constitutes an offence punishable on conviction by a fine of CI$5,000 (regulation 8).

Applies to

EU Connected Funds, regulated mutual funds, mutual funds electing registration under section 22B of the Mutual Funds Law

Deadlines

• within 21 days of the date upon which marketing ceased in all Member States: EU Connected Fund must notify CIMA that marketing has ceased in all Member States
• within 21 days of the date of the change: EU Connected Fund must notify CIMA of any change to information previously submitted under regulation 2 or 3
• within six months after the date of the end of the financial year of an EU Connected Fund: EU Connected Fund must submit written confirmation and declaration of continued compliant marketing status to CIMA