Executive Summary 

The announcement that the Cayman Islands has passed changes to its Monetary Authority Law to facilitate the marketing of Cayman Islands alternative investment funds ("AIFs") in the European Economic Area ("EU") is good news for users of Cayman Islands vehicles.  
With these changes in place the Cayman Islands Monetary Authority ("CIMA") stands ready to sign the cooperation agreements with EU regulators required under the Alternative Investment Fund Managers Directive ("AIFMD"), which comes into force on 22 July this year.

Action Points

There is no immediate action to be taken in relation to the announcement.

That said, if you have not already done so we would recommend checking in with your main legal counsel or other adviser on AIFMD to ensure that your post-22 July 2013 strategy is in place with respect to the management of Cayman AIFs or their marketing in the EU.

Cayman Islands Government Release

On 25 March 2013, the Cayman Islands Government issued a press release (the "Release") headed "Cayman Amendment Paves Way for AIFMD Compliance".  A copy of the full text of the Release and the related statement of the Minister for Financial Services can be found here.

Background on AIFMD and the Cayman Islands

The AIFMD comes into force on 22 July 2013 and will affect managers falling within the definition of "AIFM" under 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 non-EU AIFs (including Cayman Islands AIFs) to investors in the EU.

Many US-based managers of Cayman Islands AIFs currently market into the EU using the existing regimes - including national private placement rules ("NPPRs") - in place in the relevant EU countries.  In order to continue to do so after 22 July 2013 certain preconditions will need to be met. 

Aside from the need for a cooperation agreement between the US Securities and Exchange Commission and the relevant EU securities regulators, one of the main preconditions is the need for there to be a cooperation agreement in place between CIMA and each of the relevant EU securities regulators where marketing takes place. 

EU-based AIFMs of Cayman Islands AIFs will also require a cooperation agreement between their home EU securities regulator and CIMA.  

The Release highlights that CIMA has been in discussion with ESMA (the pan-EU securities markets authority negotiating the form of the cooperation agreements) since early 2012 and that the passing of The Monetary Authority (Amendment) Law, 2013 will allow CIMA to use the ESMA model when entering into additional cooperation agreements with EU securities regulators.


The Release states that CIMA's Board of Directors has already approved that CIMA may enter into agreements with the relevant EU regulators on the basis of the ESMA model.

With 22 July 2013 fast approaching, it is anticipated that ESMA will announce completion of negotiations, and signing of cooperation agreements, with key fund jurisdictions (including the Cayman Islands and the US) in the near future.  The Release affirms that the Cayman Islands has taken all necessary steps to be included in that process.

Maples and Calder's View

Maples and Calder has been involved in the EU and Cayman Islands consultation processes in relation to AIFMD from the outset.  The firm's Global Managing Partner, Henry Smith, has participated through direct engagement with the EU in both Strasbourg and Brussels and has been involved in CIMA's industry working group on AIFMD.  Paul Govier, Head of Investment Funds in London has participated in key AIMA committees/working groups on AIFMD and Peter Stapleton, the firm's lead partner on AIFMD in Ireland, has been involved in the work of the Irish Funds Industry Association on AIFMD.

Jon Fowler, Global Head of Investment Funds, commented that:

"This is good news, and sets the stage for the necessary AIFMD cooperation agreements.  For the majority of managers outside Europe this will be very reassuring news as the ability to access existing NPPRs for their Cayman Islands funds after July 2013 is key.  Similarly, EU managers with Cayman Islands funds will require a cooperation agreement between their home EU securities regulator and the Cayman Islands.  The ball is now in the court of ESMA and the relevant EU Member States to conclude the cooperation agreement process in as expedited a manner as possible."

For further information, please contact any of the individuals listed above.



Jon Fowler


+1 345 814 5526


Philip Ireland


+971 4 360 4073


Peter Stapleton


+353 1 619 2024


Anthony Webster


+852 2971 3001


Paul Govier

Managing Partner

+44 20 7466 1631


Tom Katsaros


+65 6922 8403


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