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Industry Updates

AIFMD Update: Cayman Islands and BVI Cooperation Agreements Signed

12 Jul 2013

Executive Summary

In our update dated 31 May 2013 we highlighted that the European Securities and Markets Authority (ESMA), the pan-EU securities regulator, had announced approval on 22 May 2013 of the necessary cooperation agreements under the Alternative Investment Fund Managers Directive ("AIFMD") with 34 securities regulators outside of the EU. The securities regulators in the Cayman Islands, the British Virgin Islands ("BVI") and the USA are included on the list.

The Cayman Islands Monetary Authority ("CIMA") has now confirmed in a press release (the "CIMA Release") that 25 European regulators have now signed the required cooperation agreements with CIMA.

A copy of the full text of the CIMA Release can be found here.

Similarly, the BVI Financial Services Commission (the "FSC") has now confirmed in a press release (the "FSC Release") that 25 European regulators have now signed the required cooperation agreements with the FSC.

A copy of the full text of the FSC Release can be found here.

The signature of these cooperation agreements was a condition under the AIFMD to permit the continued marketing of alternative investment funds ("AIFs") domiciled outside the EU under the relevant EU national private placement regimes. The Cayman Islands and BVI have therefore satisfied this requirement in relation to the jurisdictions specified in the releases. CIMA has also confirmed that it is in continuing discussions with the relevant European regulators to finalise the remaining cooperation agreements.

Action Points

The AIFMD generally comes into force on 22 July 2013 (although it is worth noting that some EU member states have taken flexible interpretations on the impact of the AIFMD during the one year transitional period expiring on 21 July 2014). The AIFMD will affect fund managers falling within the definition of an alternative investment fund manager ("AIFM") under the AIFMD, which:

(a) are based in the EU and 'manage' AIFs (wherever those AIFs are situated); or

(b) are based outside the EU but 'manage' EU AIFs; or

(c) are based outside the EU but 'market' their EU AIFs or non-EU AIFs (including Cayman Islands and BVI AIFs) in the EU.

AIFMs based outside the EU which intend to continue to market Cayman or BVI AIFs to investors in the EU under the relevant national private placement regimes after 22 July 2013 will need to comply with some parts of the AIFMD principally relating to some new proscriptive disclosure requirements in the AIF's offering documents and the reporting of certain financial and portfolio related information to EU regulators.

If you have not already done so, we would recommend you check with your main legal counsel or other adviser on the AIFMD as soon as possible to ensure that your post 22 July 2013 strategy is in place with respect to the management of Cayman or BVI AIFs or their marketing in the EU, particularly regarding the amendments which may be required to any offering documents and the compliance with the new reporting requirements to EU regulators.

For further information, please speak with your usual Maples and Calder contact or one of the individuals listed above.

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