The Private Funds Law, 2020 of the Cayman Islands (the "PF Law") (which came into force on 7 February 2020), requires that certain closed ended funds which fall within the definition of "private fund" as set out in the PF Law, be regulated and register with the Cayman Islands Monetary Authority ("CIMA") within twenty-one (21) days of accepting capital commitments from investors. Transitional provisions require that a private fund that has commenced carrying on business at any time prior to 7 August 2020, register with CIMA no later than 7 August 2020. The introduction of measures providing for oversight of previously unregulated closed ended funds, was aimed at increasing transparency in this sector and satisfying the requirements of global standard setting bodies.
The PF Law was amended by the Cayman Islands government on 7 July 2020 to provide clarity on how the PF Law should be applied as well as to extend its scope. The definition of "private fund" has been broadened to mean:
"a company, unit trust or partnership that offers or issues, or has issued, investment interests, the purpose or effect of which is the pooling of investor funds with the aim of enabling investors to receive profits or gains from such entity's acquisition, holding, management or disposal of investments, where:
(a) the holders of investment interests do not have day-to-day control over the acquisition, holding, management or disposal of the investments; and
(b) the investments are managed as a whole by or on behalf of the operator of the private fund directly or indirectly."
