OVERVIEW: A Look at the Approved Manager Regime in the BVI

The Approved Fund Manager regime in the British Virgin Islands has been in force since 2012 and was designed to cater to start-ups, but is equally attractive to established small and medium-sized funds. Until recently we could count the number of AFMs in the structures we administer on one hand. However this has changed rapidly over the last 6 months. Increasingly we find this regime to be of interest to managers of global funds or where managers require an additional leg to their investment advisory function, often for specific investment purposes.

Hong Kong Limited Partnership Fund Ordinance

The Limited Partnership Fund Ordinance (Cap 637) comes into operation on 31 August 2020, providing a rather ground breaking new standalone entity framework for the formation of what has been termed limited partnership funds in Hong Kong.

Cayman Islands Private Funds Law – Expanded Scope

On 7 July 2020, the Private Funds Law, 2020 (PF Law) was amended to vary the definition of a “private fund” by clarifying the definitions of certain entity types and extending the scope of the PF Law to additional entities.

The deadline for registration under the PF Law remains 7 August 2020.  We recommend that all Cayman Island investment vehicles be re-assessed to ensure compliance particularly considering the new Administrative Fine regime. Open-ended mutual funds and hedge funds are unaffected.

New CIMA fines and TIA offence in force in the Cayman Islands

The Monetary Authority (Administrative Fines) (Amendment) Regulations, 2020 was enacted on 26 June 2020 extending the ability of the Cayman Islands Monetary Authority (CIMA) to impose significant fines.

It is now also an offence for knowingly or wilfully supplying false or misleading information to the Cayman Islands Tax Information Authority (TIA).

New rules for regulated funds

As referenced in our updater on new registration requirements for Cayman Islands investment funds, the Cayman Islands Monetary Authority (CIMA) has published new rules governing the segregation of assets and the contents of offering documents and marketing materials for regulated funds.

The new rules apply to mutual funds that are regulated under the Mutual Funds Law (as Revised) and private funds registered under the recently promulgated Private Funds Law 2020.