Corporate Governance Update: Cayman Islands Regulated Funds
April 2024 A year since the introduction of the updated regulatory measures by CIMA on corporate governance for regulated entities. How are the rules and guidance being implemented by funds? The Cayman Islands Monetary Authority (CIMA) released updated regulatory measures in April 2023 in relation to the rule on corporate governance for regulated entities (Rule) and associated statement of guidance for mutual funds and private funds (Guidance). The Rule has been effective since 14 October 2023. The Rule introduced numerous changes to the previous corporate governance obligations for regulated entities and extends to private funds, which was not previously included. The Rule creates binding requirements on all entities regulated by CIMA. A breach of a Rule could lead to the issuance of a fine or enforcement action taken by CIMA. What is the purpose of the Rule and the Guidance? Pursuant to the Rule, the governing body (i.e. the board of directors, general partner or managing members depending on the entity structure) of a regulated entity (Governing Body) must establish, implement, and maintain a corporate governance framework which provides for sound management oversight and protects the legitimate interests of relevant stakeholders. The Guidance is expected to assist the Governing Body of mutual funds and private funds with interpreting the Rule for implementation in a fund context. How are funds implementing the Rule and Guidance? Funds are implementing a corporate governance manual by pulling together all their operational policies and procedures into one clear and simplified manual that cover the requirements outlined in the paragraph headed ‘What are the required Governance measures?’ below. Even though the minimum requirement for funds is for the Governing Body to meet on an annual basis, we have been assisting [...]