As we approach year-end, we remind all Cayman Islands investment funds registered with the Cayman Islands Monetary Authority (CIMA) of CIMA’s Rule on Corporate Governance for Regulated Entities and the Rule and Statement of Guidance on Internal Controls for Regulated Entities (the “Rules”), which include the obligation to have at least one “Governing Body” meeting per year.
Corporate Governance Arrangements
By now, all CIMA registered funds should have considered their corporate governance measures, documented their review and implemented appropriate corporate governance measures to adhere to the requirements of the Rules.
This exercise typically involves conducting a gap analysis, completing any necessary remediation efforts and formally adopting all relevant policies and procedures that form the funds overall corporate governance framework. CIMA has confirmed that it will expect this process to be undertaken and for the policies and procedures to be adequately documented and formally adopted by the Governing Body.
If you have not yet undertaken these steps, we urge you to do so now.
Annual Meetings 2024 Compliance
In addition to requiring formal consideration and adoption of the fund’s corporate governance framework, the Rules also require that all funds hold at least one board/general partner meeting annually. With the year-end fast approaching, if your fund has not yet convened this meeting, now is the time to arrange it. Timely compliance is crucial.
In this respect, CIMA’s Fund Annual Return (FAR) forms for both mutual and private funds require the relevant fund to state the number of board/general partner meetings held during the year. Failure to do so may be a “red flag” to CIMA as the FAR form will state that no board / general partner meetings were held for FY 2024. This further underlines the importance for all funds to hold their required meetings prior to year-end.
Further Guidance and Assistance
For more detailed guidance on the Rules and their application to funds, please refer to our publication here.
This update serves as a crucial reminder to stay ahead of your compliance obligations to avoid any regulatory or enforcement issues for your funds.
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