imageIMS Fund Services

BACKGROUND AND DEFINITIONS

The Cayman Islands have become a major jurisdiction for the establishment and administration of Mutual Funds. Mutual funds are licenced in accordance with the Mutual Funds Law (2001 Revision) which governs mutual funds incorporated in or administered from the Cayman Islands. A mutual fund is defined as a company or a unit trust or a partnership that issues equity interests the purpose or effect of which is the pooling of investor funds with the aim of spreading investment risks and enabling investors in the mutual fund to receive profits or gains from the acquisition, holding, management or disposal of investments. An “equity interest” for the purposes of the definition means an interest which is redeemable or repurchasable at the option of the investor. It follows therefore that a “closed-end” fund is outside of the ambit of the law. In addition, any mutual fund in which the equity interests are held by not more than 15 investors, the majority of whom are capable of appointing or removing the operator of the fund, is not required to comply with the requirements of the law. While the law makes provision for the regulation of mutual funds established as partnerships or unit trusts, most funds are incorporated as exempted companies.

The usual form of mutual fund utilised in the Cayman Islands is one designed to attact the sophisticated investor, and which is established to have a minimum required investment for any investor of US$48,000.00. Such a fund (termed a Regulated Section 4(3) fund) must register with the Monetary Authority, filing prescribed details in respect of its current offering document. Such a fund must file annual financial statements, audited by an approved auditor (who must be resident in the Cayman Islands.) The registration fee and annual fee for such a fund is US$2,439.00.

DETAILS TO BE FILED

The following information must be filed with the Monetary Authority for the purpose of registration as a Regulated Section 4(3) fund:

    1. Type of entity (i.e. Company, Partnership or Unit Trust)

    2. Description of the fund as set out in the Offering document, specifying:

      (a) Maximum and minimum aggregate amount of offering.
      (b) Investment objectives
      (c) Investment restrictions
      (d) Risk factors of the fund
      (e) Minimum investment for Investors
      (f) Actual or expected size of shareholder base
      (g) Frequency of valuation and shareholder issues and redemptions
      (h) Base currency of equity interest
      (i) Whether interests are to be issued in bearer or registered form

    3. Names of Directors (or Trustee or General Partner)

    4. Name and Address of Registered Office

    5. Specify all service providers, including

      (a) Distributor
      (b) Custodian
      (c) Promoter/Sponsor
      (d) Manager
      (e) Administrator
      (f) Investment or Trading Manager
      (g) Investment or Trading Advisors
      (h) Bankers
      (i) Lawyers

    6. Name and Address of auditors and financial year end

    7. Name of Stock Exchange if listed

    8. Evidence of incorporation. On submission of all required documents and the prescribed fee registration can be completed within 10 days.

PROVISION OF FUND SERVICES BY IMS

International Management Services Ltd holds a Mutual Fund Administrators Licence issued by the Monetary Authority under the Mutual Funds Law and specialises in providing professionally qualified and recognised Cayman resident directors to mutual funds (defined in the mutual funds law as "operators"). As operators to the fund IMS can coordinate and monitor the appointment and activities of fund administrators, attorneys, auditors and custodians.

Although IMS services are normally restricted to providing directors or operators to funds IMS can also assist in the licensing and administration of Cayman mutual funds by arranging introductions to a number of internationally known mutual fund administrators attorneys and auditors who are experienced with all types of Cayman registered funds.

OTHER MUTUAL FUND TYPES

Specialised compliance requirements apply to mutual funds for which the minimum investment is less than US$48,000.00 and IMS can advise on those requirements on request.

 
International Management Services Ltd
P.O. Box 61, 
Harbour Centre
George Town, 
Grand Cayman, 
Cayman Islands 

Phone:  345 949 4244 
Fax:  345 949 8635 
Email: ims@candw.ky
________________________________________________________________________