Mutual Fund Administration

Legal and Regulatory Regime for Mutual Fund Administrators

As mention above, CIMA is responsible for the regulation of Cayman Islands mutual fund administrators and has a number of powers that it may exercise, including the following:

Our specialists in this area are:

Sophia Harris
Paul Scrivener
Remo Dalimonthee

Other relevant links:

Company Application Forms
Fee Schedules for
Cayman companies
Term sheet
Terms of Engagement
www.caymanfinance.gov.ky

CIMA may, at any time, instruct a licensed mutual fund administrator to have its accounts audited and to submit them to CIMA within such reasonable time as CIMA specifies.
If requested to do so by CIMA, a licensed mutual fund administrator shall give to CIMA such information or such explanation in respect of its mutual fund administration as CIMA may reasonably require to enable it to carry out its duty under the law.
If requested to do so by CIMA, a licensed mutual fund administrator shall give CIMA access to, or provide at any reasonable time, the records of the administrator and any records under the control of the administrator relating to mutual fund administration carried out by the administrator.
If CIMA has reasonable grounds for believing a person is acting or carrying on business as a mutual fund administrator in contravention of the Mutual Funds Law, CIMA may instruct that person to give to CIMA such information or explanation as CIMA may reasonably require to enable CIMA to carry out its duty under the Mutual Funds Law.
If it appears to CIMA that a person is acting or carrying on business as a mutual fund administrator and the person is a doing so in breach of the Mutual Funds Law, CIMA has power to apply to the Grand Court for such orders as it thinks fit to preserve the assets of the investors in any mutual fund being administered by that person, and the Grand Court has power to grant such orders.
If CIMA is satisfied that a licensed mutual fund administrator is or is likely to become unable to meet its obligations as they fall due; carrying on or attempting to carry on business or is winding up its mutual fund administration business in a manner that is prejudicial to investors in any mutual fund it is administering or to its creditors or to the creditors of any such mutual fund; or carrying on or attempting to carry on the business of mutual fund administration without complying with any condition of its mutual fund administrators licence, CIMA may:
1. impose conditions or further conditions on its mutual fund administrator’s licence and to amend or revoke those conditions ;
2. require the substitution of any director or similar senior officer or general partner or administrator;
3. appoint a person to advise the administrator on the proper conduct of its mutual fund administration; and
4. appoint a person to assume control of the affairs of the administrator relating to mutual fund administration.
If CIMA takes any of the above steps, it may apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors in the funds administered by the administrator and its creditors and the creditors of any such fund, and subsequently take any other of the above steps.

A person appointed under paragraph (d) above (controller) has all the powers necessary, to the exclusion of any other person (other than a liquidator or receiver), to administer the affairs of the administrator relating to mutual fund administration in the best interest of investors in the funds administered by the administrator and its creditors and creditors of any such funds, including the power to terminate the business of the administrator so far as it relates to mutual fund administration.

A person appointed in respect of a licensed mutual fund administrator under paragraph (c) above (advisor) or a controller shall:
1. when requested to do so by CIMA, supply CIMA with such information in respect of the administrator’s administration of mutual funds as is specified by CIMA;
2. within three months of his appointment, or within such other period as CIMA may specify, prepare and supply to CIMA a report on the administrator’s administration of the mutual fund making, where appropriate, recommendations in respect of the administrator; and
3. if his appointment is not terminated after supplying the report referred to in paragraph (b), subsequently supply to CIMA such other information, reports and recommendations as CIMA specifies.
If an advisor or a controller fails to comply with his obligations specified above or, in CIMA’s opinion, is not carrying out his obligations in respect of the mutual fund administrator satisfactorily, CIMA may revoke the appointment and appoint some other person in his place.

On receipt of any information or a report from an advisor or a controller in respect of a licensed mutual fund administrator, CIMA may:
1. require the administrator to reorganize its affairs in a manner specified by CIMA; or
2. if the administrator is a company, apply to the Grand Court in accordance with the Companies Law (2004 Revision) for the company to be wound up by the Court in accordance with that law,
and may take such action in respect of the appointment or continued appointment of the advisor or controller as CIMA considers appropriate.

If CIMA takes any of the above steps, it may apply to the Grand Court for an order to take such other action as it considers necessary to protect the interests of investors in the funds administered by the administrator and its creditors or the creditors of any such funds and take any other action provided for by the Mutual Funds Law.
Without prejudice to any other power of CIMA, CIMA may, at any time, revoke a mutual fund administrator’s licence if:
1. CIMA is satisfied that the holder of the licence has ceased to carry on or to attempt to carry on business as a mutual fund administrator; or
2. the holder of the licence is placed in winding up or is dissolved.