George Town, Grand Cayman. On 10th January, 2013 the Cayman Islands amended its Mutual Fund laws to change the definition of ‘feeder” and “master” fund.
The effect of this legislative change (the “Mutual Funds (Amendment) Law, 2012”) is to provide that master funds which only had a single feeder, and which therefore had hitherto been exempt from registration and licensing under Cayman law, are now required to be registered. This requirement applies whether that feeder fund invests directly into the master, or through an intermediate holding vehicle. The affected master funds will have a transitional period until 1 March, 2013 to be registered.
Registration of the affected master funds will mean that going forward they will be subject to all of the requirements of a Cayman regulated fund; including payment of the annual fund registration fees, submission of an annual audit and fund annual return (“FAR”). There is no requirement for a separate offering memorandum to be filed with the Cayman Islands Monetary Authority, unless a separate offering memorandum has been prepared in respect of that master fund.
This only applies to a master fund whose feeder is itself regulated. If the feeder is exempt, (for instance, falling under the 15 investors or less and voting rights exemption) the master remains exempt.
For further information in relation to the above, please contact us