1. REGULATORY FRAMEWORK
1.1 What legislation governs the establishment and operation of Alternative Investment Funds?
The Mutual Funds Act (As Revised) (the "MF Act") provides for the regulation of open-ended investment funds and mutual fund administrators. Responsibility for regulation under the MF Act rests with the Cayman Islands Monetary Authority ("CIMA").
The Private Funds Act (As Revised) (the "PF Act") provides for the regulation of closed-ended investment funds. Responsibility for regulation under the PF Act rests with CIMA.
In addition, the Retail Mutual Funds (Japan) Regulations (As Revised) (the "Japan Regulations") provide a regulatory regime for retail mutual funds that are marketed to the public in Japan.
CIMA has also published rules and guidance regarding certain operational requirements for CIMA-registered mutual funds and private funds, including in respect of the valuation of assets, safekeeping of fund assets, cash monitoring and identification of securities.
Although not Cayman Islands law, the broad scope and extra-territorial effect of the EU Directive on Alternative Investment Fund Managers ("AIFMD") will capture most types of Cayman Alternative Investment Funds, regardless of whether they are open-ended or closed-ended and regardless of their legal structure and investment strategy, with very few exceptions, to the extent that they are being marketed or managed in Europe (as such terms are defined for the purposes of the AIFMD). Legislation for...
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