On 7 February 2020, the Cayman Islands Government enacted the Private Funds Law, 2020 (the PFL) and The Mutual Funds (Amendment} Law {MFL) as a result of certain international recommendations and the Cayman Islands wishing to ensure best practice with global regulatory regimes for investment funds.
Key Considerations
As you will have seen from recent legal updates, there are a number of key features of the PFL and M FL, which will effect open-ended and closed-ended funds in the Cayman Islands. In particular, a requirement for both to be registered and regulated by the Cayman Islands Monetary Authority (CIMA) and, for closed-ended funds, the implementation of core operations and processes through audit, valuation, custody, cash monitoring and securities identification requirements. This is similar to the current policies in place for open-ended funds in the Cayman Islands.
Open-ended funds that were previously exempt from CIMA regulation under S.4(4) of the MFL by virtue of there being no more than fifteen investors, a majority of whom are capable of appointing or recovering the operator of a fund, will also be required to register with CIMA. Along with the prescribed registration fees and submission of annual audited financial statements, those open-ended funds will be required to have at least 2 natural persons acting as the operator with those persons required to register under the Directors Registration and Licensing Law, 2014.
Solutions
For those open-ended funds or closed-ended funds already in wind down or who are intending to commence wind down, R&H Restructuring (Cayman) Ltd. offers a wide range of flexible services which can be tailored in terms of scope and timeline dependent on each client. This may be a viable (or feasible) option or those open-ended and closed-ended funds not wanting to incur costs associated with CIMA registration.
Our voluntary liquidation services can range from nil balance sheet appointments to appointments with complex illiquid assets and contingent liabilities where we are experienced in providing you with the relevant guidance to liquidate and dissolve your open-ended and closed-ended funds. Paired with our ability to deal with residual assets such as managing asset auctions and asset realization in the secondary market, we can also guide clients through the process of setting up a liquidating trust to hold complex illiquid assets and contingent liabilities as well as act as a licensed trustee to manage its ongoing asset realization and administration for the long-term benefit of investors. We can engage with existing management and/or principals in a consulting role during the liquidating trust so that asset background and understanding is not lost.
Our services
| Insolvency |
- Court Appointed Liquidations
- Provisional Liquidation
- Schemes of Arrangement
- Receivership
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| Contentious Fiduciary |
- Restructuring Directors
- Trust Disputes
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| Forensic & Advisory |
- Forensic Accounting
- Litigation Support
- Independent Business Reviews
- Financial Restructuring
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| Entity Closure |
- Wind-down Agent and Director
- Liquidating Trust
- Voluntary Liquidation
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Experienced, multidisciplinary team
R&H Restructuring is a multidisciplinary team with offices in the Cayman Islands and British Virgin Islands, with a diverse range of experience and specialist skills. We are professionals whose expertise and innovative approaches will provide you with the best possible result.
As an affiliate of Rawlinson & Hunter in the Cayman Islands, we benefit from our relationship with the local and international grouping. In addition to the Rawlinson & Hunter affiliation, their ongoing strategic international partnerships provides them with immediate access to resources for effectively servicing clients anywhere in the world.
This expertise includes fund fiduciary, trust, corporate, accounting and fund administration professionals who hold relevant financial industry licenses in their respective jurisdictions, holding us to the highest of global regulatory standards. We regularly work with our colleagues in these affiliated companies to provide clients with a team tailored to their needs.
As a strong, pragmatic partner, we not only add intellectual strength, but also the necessary insight to help provide decisive outcomes. Our clients are the direct beneficiaries of our group efficiency and communication. The flexibility to combine one or more service lines demonstrates our ability to deliver robust solutions to a diverse range of challenges and client needs.
Local expertise, global reach
We are well placed in the offshore market as an experienced, independent practice with minimal conflicts of interest and strong local expertise combined with the global reach of the Rawlinson & Hunter network.
Daniel McGrath
Danny is a Senior Manager in R&H Restructuring (Cayman) Ltd and leads the solvent wind-down business line, providing liquidation, wind-down management and liquidating trust services to a wide range of companies and investment vehicles, including hedge funds, trusts, private equity funds, multi-manager funds and emerging market funds across the Cayman Islands, Germany, Italy, Switzerland, the…
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