New Retail Funds Regulation implemented by CIMA
Funds licensed in Cayman have become subject to 3 new rules that were issued by the Cayman Islands Monetary Authority (CIMA) in order to further enhance the retail funds sector regulation.
Approved by the government, the new regulation became effective on April 28. The three rules are as follows: the Rule on the Contents of Offering Documents, the Rule on the Calculation of Asset Values, and the Rule on the Segregation of Assets for Licensed Funds.
The Rule on the Contents of Offering Documents outlines the information that is to be included in offering documents.
According to the Rule on the Calculation of Asset Values, funds are required to specify their policy in order to calculate the funds asset values.
The Rule on the Segregation of Assets for Licensed Funds calls for a portfolio of a fund to be segregated and accounted for separately from the assets of a service provider.
The above-mentioned rules aim at ensuring that prospective retail investors will be able to make informed investment decisions, and enhancing the overall protection of investors in the licensed funds and their assets.
It should be noted that the rules formalise what has been common practice among the funds licensed in the Cayman Islands. Cayman codified these practices in line with the standard issued by the International Organization of Securities Commissions (IOSCO) entitled the Objectives and Principles of Securities Regulation.