Cayman Imposes New Registration Requirements for Private Equity, Other Closed-Ended Fund Structures

Cayman Imposes New Registration Requirements for Private Equity, Other Closed-Ended Fund Structures

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Greyline Partners has entered into an exclusive relationship with a Cayman onshore provider to assist with the fund registration process. Please contact us immediately if you sponsor and/or manage private funds (or plan to do so) that fall within scope and will need to register by this summer.

Background: On Feb. 7, 2020, the Cayman Islands Government enacted the Private Funds Law, 2020 and an amendment to the Mutual Funds Law. The legislation is a result of certain European Union and other international recommendations and has been developed to align the Cayman Islands’ regulatory structure with other jurisdictions.

The Private Funds Law applies to any Cayman Islands closed-ended fund. If such a fund falls within the definition of a “private fund,” it will need to register with, and be regulated by, the Cayman Islands Monetary Authority (CIMA). Open-ended hedge funds and similarly structured pooled investment vehicles are not caught by this new law and will continue to be regulated by the Mutual Funds Law.

Private funds are companies, unit trusts or partnerships:

  • (i) that are in the principal business of offering and issuing their interests for the purpose or effect of pooling investor funds to share investment risk and enable investors to participate in profits and gains from acquiring, holding, managing, or disposing of investments,
  • (ii) where the investors do not control the day-to-day operation of the private fund (directly or indirectly), and
  • (iii) where the investments of the private fund are managed as a whole by the operator of the private fund for compensation based on the assets, profits, or gains of the entity constituting the private fund.

Relevant Deadlines

  • Existing Cayman Funds: Aug. 7, 2020
  • New Cayman Funds: Within 21 days of accepting capital commitments
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Darren Mooney

Partner and Co-Head of Business Development

Darren Mooney is a Partner and the Co-Head of Business Development at Greyline. Before joining Greyline, Darren served as deputy chief compliance officer of Partner Fund Management where he held primary responsibility for the compliance program of the second-largest hedge fund in the Bay Area. Prior to that, Darren spent five years providing compliance consulting services at Cordium and then ACA Compliance Group, where he led the company’s San Francisco office and west coast operations. In addition to providing ongoing consulting services to a variety of investment managers, including hedge fund, private equity, venture capital, real estate, quantitative and other wealth managers, Darren also regularly guided clients through the SEC registration process, implemented tailored compliance programs, supported clients’ live SEC exams, and served as an SEC-mandated independent compliance consultant following an SEC enforcement action. Darren’s other experience includes serving as deputy chief compliance officer and associate counsel at F-Squared Investments where he directly supported the compliance program during the investigation and subsequent enforcement regarding historical advertising practices. Darren has a B.S. in Economics from the University of Delaware and a J.D. from Suffolk University Law School. He is a member of the Massachusetts bar.

Annie Kong

Partner and Head of Venture Capital
Annie Kong is a Partner and Head of the Venture Capital Division at Greyline. She provides ongoing compliance consulting to investment advisers and manages client relationships. Prior to joining Greyline, Annie was part of compliance and operations at a long-only manager-of-managers that advised pension fund clients. While there, she conducted compliance and operational due diligence on SEC-registered investment advisers on the platform. She also oversaw and counseled on various legal matters across the firm. Annie has a B.A. in Economics from the University of California, San Diego, and a J.D. from the University of San Diego School of Law. She is an active member of the State Bar of California.
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