To help Cayman hedge funds navigate the myriad issues brought about by COVID-19, this article offers a high-level checklist for fund directors and investment managers to consider. The checklist covers operational issues, issues around liquidity and possible termination and communication and reporting considerations. Each of these topics is considered in turn in relation to a typical standalone corporate open-ended Cayman fund. That said, most of the checks can be applied using a variety of Cayman vehicles.
In light of the COVID-19 pandemic and with many people now working remotely, companies are increasingly considering the use of digital contracts and electronic signatures. To help minimise disruption and ensure business continuity, this article summarises the legal position in the Cayman Islands and provides practical advice on implementation.
The Foundation Companies Law 2017 was a welcome addition to the Cayman Islands legal landscape. The law introduced a brand new legal entity known as the 'foundation company' – a remarkably flexible vehicle that operates like an incorporated trust, allowing it to function like a civil law foundation or common law trust while retaining the separate legal personality and limited liability of a company.
Section 238 of the Companies Law (2020 Revision) provides an avenue through which shareholders of a merged or consolidated Cayman Islands company can apply to have the fair value of their shares determined by the Grand Court. Section 238 has its origins in Delaware law and was first introduced into the Cayman Islands Companies Law in 2009. After a relatively uneventful first few years in operation, Section 238 is now at the forefront of jurisprudence.
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.
The Court of Appeal has provided much needed clarification of the test for validating certain transactions by companies that are subject to a winding-up petition, pursuant to Section 99 of the Companies Law (2020 Revision). Section 99 operates to help maintain the status quo of a company at the date of a winding-up petition so that the winding-up petition can continue to achieve its purposes.
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.