By Richard Addlestone, Solomon Harris – In response to the push towards greater global transparency on beneficial ownership, the UK has proposed a public register of ownership interests in companies, which could be searched by anyone, anywhere in the world. It hopes the other G8 members will copy its model, but has left it to the Cayman Islands Government (‘CIG’) to decide if it wants to follow suit. The CIG has published a public consultation document on whether a central registry of beneficial ownership of interests in companies is the most appropriate and effective way to improve transparency. Currently, the

Although the AIFM Directive is uniform EU-wide regulation each member state is likely to adjust its national private placement regime rules idiosyncratically. For managers of non-EU funds, therefore, it’s important that they are clear on the rules if they intend to continue marketing to Europe. “Where managers have Cayman funds they need to talk to their European advisers in the relevant jurisdictions in which they wish to market those funds and also to their Cayman advisers,” says Matt Mulry (pictured), partner at Dillon Eustace. “Managers want to know how the AIFMD will affect them and their funds, what they can

By James Williams – “In 2012, our voluntary application got approved by CIMA to have a regulated director services model, called DMS Fund Governance. What that means is that just like an auditor or an administrator in the Cayman Islands, we are regulated by CIMA as a service provider to hedge funds,” confirms Kathleen Celoria, Executive Director (New York) DMS Offshore Investment Services. With over 80 full-time directors and associate directors, DMS is the world’s largest provider of fund governance services. What is revealing in Celoria’s comment is that it shows DMS has been some way of ahead of the curve

By Colin MacKay, Ogier Fund Services – At its recent annual general meeting, the Cayman Islands Directors Association reported that new member applications in 2013 grew by over 15 per cent; further evidence, if it were needed, that the provision of corporate governance to alternative funds is one of the fastest growing sectors of the Cayman financial services industry. The debate on how best to prescribe and regulate the provision of effective corporate governance remains one of the most important to the industry, both at home and abroad. The challenge facing service providers and the Cayman Islands Monetary Authority (CIMA),

“Personally I think the Segregated Portfolio Company (SPC) structure has the potential to become a nightmare,” states Mike Saville (pictured), Director, Recovery & Reorganisation for Grant Thornton Specialist Services (Cayman) Ltd. “The structure is a way to spread administration and directorship costs but because an SPC is typically composed of multiple cells operating under one legal entity investors are setting themselves up for additional risks should problems arise.” Each cell within an SPC will have its own assets, liabilities and shareholders. Also, each cell is protected from claims by creditors of other cells against its designated assets.   Cost efficiencies

By Ras Sipko, Chief Operating Officer of Koger – Regardless of the differences in their intent and emphasis, both the Alternative Investment Fund Managers Directive (AIFMD) and the Foreign Account Tax Compliance Act (FATCA) impose considerable demands on fund managers with regard to data management and documentation. According to a recent and widely cited global survey of hedge fund managers by KPMG International, the Alternative Investment Management Association, and the Managed Funds Association, the hedge fund industry has already spent more than $3 billion to comply with new regulatory requirements, and considers FATCA and the AIFMD to be the most

The Statement of Guidance on corporate governance for mutual funds (SoG) published by CIMA in December 2013 is one of the key regulatory developments to have come out of the Cayman Islands in recent years. The results of an initial consultation with industry service providers were published by CIMA in July 2013. “The SoG is essentially CIMA providing high-level guidance on the minimum standards required of a fund director and is really an extension of the case law in the Cayman Islands summarised by Justice Jones QC in the Weavering case with respect to directors’ duties,” says Ian Gobin (pictured),

The one known unknown facing managers amidst increased regulation is the rising cost of doing business. But it’s not just managers facing cost pressures. Service providers are too, especially fund administrators who serve as gatekeepers to data managers and need to meet their myriad reporting needs.   “Each jurisdiction has their own agenda and has come up with their own form of reporting requirements. This creates a situation where everybody needs information from a number of different sources and that drives up the costs for managers and service providers,” says Canover Watson (pictured), Managing Director at Admiral Administration, now part

By Tim Buckley (pictured) and Ed Pearson, Walkers – After spending much of the year in consultation with the industry, CIMA’s near-term regulatory approach is becoming clearer. In early December, CIMA released its Statement of Guidance for regulated mutual funds, which sets out the Authority’s minimum expectations for sound and prudent governance. Accompanying the guidance was a summary of feedback the authority had received from industry participants in the course of its consultation.   Overall, the guidance reinforces the themes that have emerged following the financial crisis: transparency, information exchange and good corporate governance. In addition, it reflects the principles

By Geoff Ruddick, IMS Fund Services – Independence – Independence is the ‘Holy Grail’ of effective corporate governance. If a director is not independent, conflicts of interest will inevitably arise and interfere with the director’s ability to act in the best interests of the fund. Experience – You will get a good idea of a director’s experience from their ‘bio’, which will appear in the offering document of the fund. Confirm they have experience serving on boards with similar strategies. Although independent directors do not need to be experts a general understanding of the fundamentals of the underlying strategy is