October 21, 2020

Cayman Achievements in Peer Reviews and AIFMD Compliance

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showThumbnail.aspxBy Harney Westwood & Riegels From Harneys

The Cayman Islands have moved forward in terms of peer reviews and AIFMD compliance.

OECD – Successful Compliance Ratings

The Global Forum of the Organisation for Economic Co-operation and Development met in Jakarta during November 2013 and, as part of the actions taken, published a new set of compliance ratings of a number of countries and jurisdictions on practical implementation of the Global Forum’s information exchange standard.  This is a key measure of compliance with the leading global requirements of transparency and good regulatory standards.  The Cayman Islands recently completed the second level review and were awarded a successful ’Largely Compliant’ rating. This places the Cayman Islands in the same band as many of the other leading global financial centres including, among others, the US, UK, The Netherlands and Germany.

Cayman’s favourable rating is a clear indication of its long standing and continuing tradition of meeting and exceeding its international cooperation obligations and adherence to high standards. Over the years, Cayman has also achieved excellent reviews from other international organisations such as the International Monetary Fund and the Financial Action Task Force.

AIFMD – Cayman Funds to continue to be available for offering across the EU

The Cayman Islands Monetary Authority (“CIMA”) announced that it has entered into Memoranda of Understanding (“MOU”) with 27 European countries which will enable the continued marketing of Cayman Islands funds throughout the European Union, with the latest MOU being signed with Bundesanstalt für Finanzdienstleistungsaufsicht of Germany (“BaFin”).

The MOUs relate to the Alternative Investment Funds Management Directive (“AIFMD”) which requires that certain conditions be met before Cayman (and other non-EU countries) can market alternative investment funds within the EU, including the signing of MOUs by CIMA with the regulators of EU member states.

The Managing Director of CIMA, Mrs Cindy Scotland, said “This MOU is the latest success in our continuing efforts to secure MOUs with our European counterparts. Each MOU is a victory for the Cayman Islands hedge fund industry, as the growing collection of agreements fosters cross-border business in accordance with the AIFMD.”

CIMA’s press release can be viewed below along with the list of other countries which have signed MOUs with CIMA.

The Cayman Islands are the world’s leading jurisdiction for alternative investment funds. They have for years been at the forefront of robust and balanced regulation of such vehicles and boasts an unmatched infrastructure of high quality service providers, a sophisticated dedicated judicial system with particular expertise in financial matters, and the trust of global institutional and individual investors.

Related story:

CIMA Signs Memorandum of Understanding with German Counterpart

(Grand Cayman – Friday, 22 November 2013) The Cayman Islands Monetary Authority (CIMA) has now signed Memoranda of Understanding (MOUs) with 27 of its European counterparts in relation to the Alternative Investment Funds Management Directive (AIFMD).

CIMA’s Managing Director, Mrs. Cindy Scotland, signed an MOU on behalf of the Authority with Bundesanstalt für Finanzdienstleistungsaufsicht of Germany (BaFin) today. The MOU provides for mutual assistance regarding supervising managers of alternative investment funds who operate on a cross-border basis in both jurisdictions.

These MOUs will enable the continued marketing of Cayman Islands hedge funds throughout the European Union under the AIFMD, which was implemented across Europe from 22 July, 2013. It requires that certain conditions be met before non-EU countries can market alternative investment funds – such as hedge funds – in the EU.

Mrs. Scotland said “This MOU is the latest success in our continuing efforts to secure MOUs with our European counterparts. Each MOU is a victory for the Cayman Islands Hedge Fund industry, as the growing collection of agreements fosters cross-border business in accordance with the AIFMD.”

Earlier this year, the Cayman Islands secured MOUs with the following financial authorities – members of the European Securities and Markets Authority (ESMA):

Finanzmarktauficht (Austria); Autoriteit Financiële Markten (The Netherlands); Autorité des marchés financiers (France); Financial Services and Markets Authority (Belgium); Central Bank of Ireland (Ireland); Comissão do Mercado de Valores Mobiliários (Portugal); Financial Supervisory Authority (Romania); Commission de Surveillance du Secteur Financier (Luxembourg); Cyprus Securities and Exchange Commission (Cyprus); Czech National Bank (Czech Republic); Finansinspektionen (Sweden); Finanssivalvonta (Finland); Finanstilsynet (Denmark); Finanšu un kapitāla tirgus komisija (Latvia); Estonian Financial Supervision Authority (Estonia); Polish Financial Supervision Authority (Poland); Financial Conduct Authority (United Kingdom); Financial Supervision Commission (Bulgaria); Hellenic Capital Market Commission (Greece); Bank of Lithuania (Lithuania); Malta Financial Services Authority (Malta); Národná banka Slovenska (Slovak Republic); Pénzügyi Szervezetek Állami Felügyelete (Hungary); Fjármálaeftirlitið (Iceland); Finanstilsynet (Norway); and Finanzmarktaufsicht (Liechtenstein).

Other ESMA members which are still to sign agreements with the Cayman Islands are Italy, Slovenia and Spain.

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