Continuing obligations of a Cayman Islands registered private fund

Описание: This guide sets out the continuing obligations under Cayman Islands law of a closed-ended fund registered with the Cayman Islands Monetary Authority (CIMA) under the Private Funds Act (Private Funds Act).

Part A of this guide covers the ongoing obligations of a private fund that is registered under the Private Funds Act, as well the various FATCA and CRS requirements, and anti-money laundering compliance.

A private fund, registered with CIMA under the Private Funds Act, can be structured as an exempted company, limited partnership, limited liability company or unit trust, each of which also have ongoing obligations.

Part B applies to a fund that is an exempted company incorporated with limited liability and an authorised share capital. If the fund is an exempted limited partnership see also Part C. If it is a limited liability company (LLC) incorporated under the Limited Liability Companies Act (LLC Act) see also Part D and if it is an exempted trust, see also Part E.

Please see our guide to private funds in the Cayman Islands for more details of the closed-ended fund structures and requirements under the Private Funds Act.

CIMA has the power under the Monetary Authority Act (MA Act) to impose significant administrative fines of up to CI$1 million (US$1.2 million) for each breach of certain provisions of the Anti-Money Laundering Regulations (AML Regulations) and other Cayman Islands regulatory laws and regulations, including the Private Funds Act and Securities Investment Business Act. The level of an administrative fine will depend on various factors including whether the breach is committed by an individual or a body corporate and if the breach is classified as minor, serious or very serious.

An overview of the annual compliance dates is set out in our compliance calendar, which can be found here on our website.

Note in particular that penalties frequently apply for late filings and so the registered office should be informed promptly of any notifiable changes to allow the appropriate filing/s to be made.

Action Required

Timing and Penalties

Must be paid to CIMA.

CI$4,125/US$5,031

If the fund has alternative investment vehicles an additional annual fee of CI$525/US$641 per alternative investment vehicles is also payable to CIMA.

If a fund is structured as a segregated portfolio company an additional annual fee of CI$525/US$641 per segregated portfolio is also payable to CIMA.

By 15 January of each calendar year.

1/12 of the annual fee due for each month the payment remains outstanding.

Action Required

Timing and Penalties

A copy of such changes must be filed with CIMA.

Filing fee CI$125/US$153.

Within 21 days of becoming aware of the change.

Penalty under Private Funds Act of CI$20,000/US$24,390 for failing to do so.

Action Required

Timing and Penalties

All private funds must conduct asset valuations.

The valuation must be done on an appropriate and consistent basis, which must be at least annually, and in accordance with CIMA's Rules on the Calculation of Net Asset Values for private funds.

The valuation must be done by an independent third party, independent administrator, or the manager or operator of the private fund subject to appropriate operational independence and disclosure of the potential conflicts of interest to investors.

Must be done on an appropriate and consistent basis, at least annually.

CIMA has the power to require that the valuation is verified by an auditor or independent third party, where the valuation is not undertaken by an independent third party.

Penalty under Private Funds Act of CI$20,000/US$24,390 payable by the operator if the fund does not comply with the law.

Action Required

Timing and Penalties

All private funds must monitor cash flows, cash account receipts and payments to investors.

The monitoring must be done by an independent third party, custodian or administrator, or the manager or operator of the private fund subject to appropriate operational independence and disclosure of the p...