The Cayman Islands is the leading offshore domicile for hedge funds, and as regulators and investors have placed more stringent requirements on good governance and oversight, independent directors have taken up the mantle of supporting the asset management industry.
The Cayman Islands is the leading offshore domicile for hedge funds, and as regulators and investors have placed more stringent requirements on good governance and oversight, independent directors have taken up the mantle of supporting the asset management industry. In 2014, the Cayman Islands Monetary Authority (CIMA) introduced the Directors’ Registration and Licensing Act. In 2020 the Cayman Islands Government approved important amendments to the Mutual Funds Act 2020 as well as rolling out and introducing the Private Funds Act 2020 that lead to an increase in the number and categories of closed-ended and open-ended Cayman investment vehicles required to register with the Cayman Islands Monetary Authority (CIMA). These laws require more oversight in the areas of fund administration, Director responsibilities/Governance requirements, audit requirements and general regulatory oversight to a large number of previously unregistered Investment Funds.
New Mutual Funds must have Registered and Licensed independent directors on their boards, many of whom are seasoned professionals based in Cayman. A few well known firms of independent directors based in Grand Cayman include Cayman Management, the Bell Rock Group, the Carne Group, HighWater, ICG Management Limited, Waystone and law firms, such as the Maples Group, Ogier and Walkers.
Cayman had come under pressure from institutional investors and overseas regulators (such as the International Organisation of Securities Commissions (IOSCO)) to enhance its regulatory regime in relation to governance and anti-money laundering monitoring. By taking these steps Cayman stays not only competitive but reaffirms its position as the world’s hedge fund domicile of choice over the likes of Dublin and Luxembourg, as it also seeks to strike a balance between being sufficiently regulated, without the regulations being overly burdensome, and therefore keeping Cayman attractive to new investors.
For a list of the top firms in the Cayman Islands who offer independent director services please see here: