The Cayman Islands Monetary Authority (CIMA) have agreed to sign a Memoranda of Understanding with member organisations of the European Securities and Markets Authority (ESMA).  This MOU is in compliance with the Alternative Investment Funds Management Directive (AIFMD), which will require that certain conditions be met before non-EU countries such as the Cayman Islands mutual funds can be marketed in the European Union. ESMA’s has approved the signing of the MOU with CIMA.

This is an important step as the AIFMD will be implemented in Europe from 22 July 2013 although there is a transitional period allowing for the existing exemptions for hedge funds to be relied upon.

The premier (Alden McLaughlin) of the Cayman Islands stated “These MoUs will enable the continued marketing of Cayman Islands hedge funds throughout the European Union. Europe is a significant market for us, since approximately 23% of Cayman-regulated fund assets are managed by a European Manager,” .

“With the enactment of the Mutual Funds Law, the Cayman Islands has become the leading jurisdiction for funds,” said the new financial services minister, Wayne Panton. “Despite continued volatility in the global financial markets, the Cayman Islands funds industry has performed exceptionally well, with 10,932 funds regulated by CIMA as of 31 March, 2013.  The signing of the MoUs with ESMA members is an important step in maintaining our competitiveness in the European market,”.

Twenty EU authorities have already signed the MoU with CIMA, in the margins of the meeting of the Board of Supervisors of ESMA on Wednesday. On the same day, the Board of Supervisors of ESMA approved MoUs with 33 other non-EU authorities.

CIMA Managing Director (Cindy Scotland) stated that  “CIMA has been in discussion with ESMA on the model requirements since early 2012, and we are very pleased that arrangements are being put in place which will enable the Cayman Islands to remain a preeminent jurisdiction for hedge funds,”.