The Cayman Islands has a friendly regime in place for the formation of Managers to investment funds.
Securities Investment Business Law (2011)
The Cayman Islands has had the Securities Investment Business Law (“SIBL”) since 2002 and therefore the process is well defined and straightforward.
SIBL is designed to ensure that entities carrying out investment business from the Cayman Islands are fit and proper and to do so they are required to obtain a license from the Cayman Islands Monetary Authority (CIMA). However, the majority of fund managers can rely on an exclusion from obtaining a license.
Exclusions from SIBL License
The main application of SIBL applicable to managers of investment funds or private equity funds is where they carry on securities investment business for an entity whose investors are ‘sophisticated persons’ or ‘high net worth’ which is the case for most funds. In such cases the Cayman manager is treated as being exempt from obtaining a SIBL License.
Where the Cayman manager is not required to obtain a license due to the nature of the investors they manage money for, then they are treated as an ‘Excluded Person’ for the purposes of the SIBL.
The Cayman manager that is an Excluded Person is required upon commencement of operations and annually thereafter to file a SIBL Excluded Persons form with CIMA together with the fee (US$6,098). The Cayman manager must supply certain information in the Excluded Persons form including the confirmation that they only deal with sophisticated persons and the designation of a Money Laundering Reporting Officer.
We can help
Please see our additional services here which are complimentary to our services to Cayman managers.
At MG our directors have more than 10 years direct funds industry experience and we specialize in assisting Cayman formed managers with all their requirements and we would be delighted to share our experience.