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Cayman Islands Welcomes Upcoming AIFMD Assessment

by Mike Godfrey, Lowtax.net, Washington
27 October, 2015

The European Securities and Markets Authority (ESMA) is to begin assessing whether the Cayman Islands should be included in the "passport" regime under the terms of the Alternative Investment Fund Managers Directive (AIFMD).

An AIFMD passport – currently only available to EU countries – would allow Cayman alternative investment funds (AIFs) to perform management and/or marketing activities within the EU without being required to set up operations in the EU.

An earlier assessment of other jurisdictions by ESMA resulted in positive advice being given in respect of extending the passport to Guernsey and Jersey, conditional advice in respect of Switzerland (subject to the enactment of pending legislation in Switzerland), and a deferred conclusion in respect of Hong Kong, Singapore, and the United States.

The second assessment group will include the Cayman Islands and also Australia, Canada, Japan, the Isle of Man, and Bermuda.

Jude Scott, the CEO of Cayman Finance, said: "With the implementation of new opt-in AIFMD regulatory regimes for investment fund managers and investment funds [in the Cayman Islands] – both of which are compliant with the requirements of AIFMD – we are optimistic of a positive advice being given by ESMA in respect of the Cayman Islands prior to the AIFMD passport framework being put in place..."

The AIFMD was introduced to improve oversight of funds marketed to EU consumers, and a transitional period ended on July 22, 2014. EU managers marketing EU AIFs are required to obtain an EU-wide passport to market their funds to professional investors. Non-EU Alternative Investment Fund Managers (AIFMs) or non-EU AIFs managed by EU AIFMs will be unable to obtain a passport until at least 2016, and have instead marketed their funds through a National Private Placement Regime (NPPR).

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