The Cayman Islands maintains its status as a leading jurisdiction for offshore funds, with over 17,700 closed-end funds registered as of September 2025. These funds operate under the Private Funds Act and rules and guidance issued by the Cayman Financial Services Authority (CIMA).
Key regulatory obligations include:
- Annual asset valuation
- Fund asset storage and verification
- Cash monitoring and asset segregation management
- Identification of Trading Securities
- Corporate Governance and Internal Controls
Fund operators (e.g., general partners, trust trustees, boards, etc.) are required to establish governance structures that are appropriate to the size, structure, complexity, nature of the business, and risk profile of the fund. These obligations apply at the fund level, making it a significant difference for sponsors who have prioritized compliance in their investment management functions.
Funds are also required to comply with anti-money laundering (AML) and counter-terrorist financing (CFT) standards, and CIMA requires a high level of compliance to maintain the international reputation of jurisdictions. Any regulatory violations can result in fines or enforcement actions.
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