Cayman Islands updates

Corporate Finance/M&A

New registration requirements for unregulated investment funds
Ogier
  • Cayman Islands
  • 12 February 2020

The government recently approved the Private Funds Bill 2020 and an amendment to the Mutual Funds Law (2020 Revision). The legislation is the result of certain EU and other international recommendations and has been developed to align the Cayman Islands investment fund regulatory regime with those of other jurisdictions. This article summarises the key features of both pieces of legislation.


Insolvency & Restructuring

Primeo: should a liquidator alter register of members?
  • Cayman Islands
  • 20 April 2018

The Cayman Islands Court of Appeal has held that a liquidator cannot use his or her statutory power pursuant to Section 112(2) of the Companies Law to rectify the register of members where the effect would be to override investors' proprietary rights. It held that the section does not aim to provide for substitution of incorrect net asset value if, despite its incorrectness, it has been calculated in accordance with a member's contractual rights.


Insurance

New opportunities for blockchain use in insurance industry
Ogier
  • Cayman Islands
  • 21 January 2020

It has been more than a decade since blockchain – or distributed ledger technology – appeared on the financial services landscape. Yet, it is still capable of generating excitement as its value in transforming processes continues to develop. As blockchain increases its reach and its impact in specific industries grows, this will generate a need for suitable models of insurance. Cayman-based technology companies have expressed interest in buying insurance from local insurers.


Litigation

Court of Appeal overturns anti-suit injunction in favour of Argyle Funds SPC Inc
Ogier
  • Cayman Islands
  • 05 February 2019

The Court of Appeal has unanimously allowed every ground of an appeal by the liquidators of Argyle Funds SPC Inc. The key takeaway for the Cayman Islands professional services industry is that where work is delegated to be carried out by related entities outside the Cayman Islands, any attempt to contractually limit clients' rights to bring claims against those entities must be expressly articulated within the contract.

Grand Court examines master-feeder redemption procedures
  • Cayman Islands
  • 16 October 2018

A recent Grand Court decision is significant for Cayman master-feeder fund structures. Funds and their advisers should review the redemption provisions in master fund articles of association and partnership agreements to ensure that, operationally, redemptions are being effected in accordance with such documents.

Grand Court gives directions for dissenters' discovery in appraisal action
  • Cayman Islands
  • 11 September 2018

Following the recent Court of Appeal decision in Qunar, the Grand Court handed down written reasons for its further directions for dissenters' discovery in a Section 238 appraisal action. The reasons acknowledge that the Grand Court's approach to discovery has changed as a result of the Court of Appeal's decision, such that a "general requirement for automatic mutual disclosure" now applies.

Dishonesty is a serious allegation and must not be pleaded lightly: rolled-up plea is insufficient
  • Cayman Islands
  • 21 August 2018

The Grand Court has set out the requirements for pleading a cause of action of dishonest assistance and reaffirmed the established principles of the defence of estoppel. The decision provides welcome comfort to corporate entities with robust and thorough systems for detecting fraud.

Security for costs – a foreign affair
  • Cayman Islands
  • 17 July 2018

During the early stages of litigation, a well-advised defendant will consider how to enforce a Cayman Islands court costs order in the foreign jurisdiction where the claimant's assets are located, and whether it should seek security from the claimant for the costs of doing so. The Court of Appeal has recently considered whether a foreign claimant should give security limited to the costs of enforcing an order in the foreign jurisdiction only or for the (much greater) amount of defending the appeal.


Private Client & Offshore Services

Contributed by Ogier
New registration requirements for unregulated investment funds
  • Cayman Islands
  • 06 February 2020

The government recently approved the Private Funds Bill 2020 and an amendment to the Mutual Funds Law (2020 Revision). The legislation is the result of certain EU and other international recommendations and has been developed to align the Cayman Islands investment fund regulatory regime with those of other jurisdictions. This article summarises the key features of both pieces of legislation.

New opportunities for blockchain use in insurance industry
  • Cayman Islands
  • 16 January 2020

It has been more than a decade since blockchain – or distributed ledger technology – appeared on the financial services landscape. Yet, it is still capable of generating excitement as its value in transforming processes continues to develop. As blockchain increases its reach and its impact in specific industries grows, this will generate a need for suitable models of insurance. Cayman-based technology companies have expressed interest in buying insurance from local insurers.

Subscription-secured financings: perfection versus enforcement
  • Cayman Islands
  • 19 December 2019

The Cayman Islands is one of the leading jurisdictions in the world for the establishment of closed-ended investment funds. Funds are often formed as exempted limited partnerships (ELPs). While other types of Cayman vehicle can be, and are sometimes, used as fund vehicles depending on the circumstances, an ELP is by far the most common type of entity used. Consequently, this article focuses solely on subscription-secured financings with an ELP as the choice of fund vehicle.

Q&A on Cayman AML regime: service providers, delegation and risk-based approach
  • Cayman Islands
  • 13 June 2019

The government and the Cayman Islands Monetary Authority are well aware that it is imperative that the Cayman Islands is not only perceived to, but does in fact, play a central role in the global fight against money laundering and terrorist financing. At the same time, there is a deep understanding of the need to remain competitive and commercial. This article addresses a number of key questions concerning the 2018 amendments to Cayman's anti-money laundering regime.

Impact of evolving relationship between investors and managers on fund structuring
  • Cayman Islands
  • 06 June 2019

This article addresses how the landscape for the structuring of offshore investment funds established in the Cayman Islands is changing and how this change is being driven by the evolving relationship between investors and investment fund managers – in particular, how the balance of power has in many cases shifted from the manager to the investor.