The Cayman Islands Government has passed an amendment allowing the jurisdiction’s regulator to enter a memoranda of understanding with its EU counterparts, with the aim of facilitating the marketing of Cayman hedge funds in the European Union, reports Hedge Week.
The amendment will use a model MoU developed by the European Securities Markets Authority (ESMA).
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Cayman’s financial services regulator, the Cayman Islands Monetary Authority (CIMA), has been in discussion with ESMA since early 2012 on the model MoU requirements. The amendment will allow CIMA to use the ESMA model when entering into any additional cooperation agreements with EU securities regulators.
Members of the EU will use the ESMA model when entering into MoUs with ‘third-country’ jurisdictions – meaning any jurisdiction that is not an EU Member State, including countries such as the US, Canada, Brazil, and Hong Kong.
The Monetary Authority (Amendment) Law, 2013, is in response to the EU’s Alternative Investment Fund Managers Directive (AIFMD, which require certain conditions to be met before non-EU countries can market alternative investment funds – such as hedge funds – in the EU.
Minister Anglin said that with the amendment, Cayman now complies with the three AIFMD conditions that are of particular relevance to the jurisdiction. He noted that the condition of compliance with Financial Action Task Force standards, and of Cayman having agreements in place with EU Member States for the exchange of information for tax purposes.
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