Cayman Islands Mutual Fund

In the Cayman Islands, “mutual fund” is a regulatory term for an open-ended fund whose investors can redeem their interests; closed-ended funds such as private equity vehicles are regulated separately under the Private Funds Act. Mutual funds may be companies, segregated portfolio companies, unit trusts or exempted limited partnerships. The main categories are registered funds (the most common, generally requiring a minimum initial investment of CI$80,000, about US$100,000, per investor, or listing on an approved exchange), limited investor funds (up to 15 investors, a majority of whom can appoint or remove the operator), administered funds (with a licensed Cayman administrator as principal office), and licensed funds.

Regulated mutual funds must register with CIMA before operating, pay annual fees, have their accounts audited annually by a CIMA-approved local auditor, and file audited financial statements and a fund annual return within six months of year-end. CIMA rules also cover valuation, cash monitoring, custody or verification of assets, and identification of securities, and funds must maintain AML/CFT officers and comply with FATCA and CRS.

Cayman mutual funds are frequently used in master-feeder structures with a Delaware feeder. Fees, thresholds and filing deadlines are reviewed periodically; check current requirements with Cayman counsel.