The Foley Adviser

Cayman Islands Master Fund Registration Update

March 16, 2012

Under the recent Cayman Islands Mutual Funds (Amendment) Law, 2011 (the “Amendment”), certain master funds formed in the Cayman Islands are required to register with the Cayman Islands Monetary Authority (CIMA). The Amendment defines “master fund” as “a mutual fund that is incorporated or established in the Islands that holds investments and conducts trading activities and has one or more regulated feeder funds.” In response to varying interpretations of the Amendment, the Government of the Cayman Islands issued a release stating that it intends to draft and adopt a further bill clarifying the scope of the Amendment. Through this bill, the Government intends to make clear that even a master fund with just one feeder fund and no other investors (commonly known as a “mini-master”) will be subject to the master fund registration requirements of the Amendment.

Master fund structures subject to registration must register and be in compliance with the new requirements by March 21, 2012.