CAYMAN ISLANDS Trends and Developments Contributed by: Dan Beckett, Iain Anderson, Joni Ebanks, Christina Gordon and Alex Howard, Maples Group
Additionally, an investment fund registered with CIMA under the Private Funds Act (As Revised) or the Mutu - al Funds Act (As Revised) may choose to comply with BOTA by either satisfying obligations under the default regime (as highlighted above) or availing itself of an investment fund-specific alternative route to compli - ance. A registered investment fund that elects to pursue the alternative option will not be required to maintain a register of its beneficial owners. Instead, Cayman Islands domiciled investment funds registered with CIMA as mutual or private funds that rely upon the alternative route to compliance will be required to supply the contact details of certain Cayman Islands service providers, such as its registered office services provider or a licensed fund administrator. That contact person will be required to provide beneficial ownership information, on behalf of the registered investment fund, to the competent authority on request within 24 hours (or such longer period as may be specified in the competent authority’s request). BOTA also provides for access to beneficial ownership information to two categories of persons: • certain Cayman Islands enforcement authorities, government agencies, financial institutions and designated non-financial businesses and persons and others; and • certain members of the public that meet a “legiti - mate interest access” test. Pursuant to the above-mentioned “legitimate interest access” test, a member of the public who applies for access to beneficial ownership information must be: • a person engaged in journalism or bona fide aca - demic research; • acting on behalf of a civil society organisation whose purpose includes the prevention or combat - ing of money-laundering, its predicate offences or terrorism financing; or • seeking that information in the context of a poten - tial or actual business relationship or transaction with the legal person about whom that information is sought.
In all cases, the member of the public must have a legitimate interest in that information for the purpose of preventing, detecting, investigating, combating or prosecuting money laundering or its predicate offenc - es or terrorist financing. The International Tax Co-Operation (Economic Substance) Act In further response to and compliance with OECD base erosion and profit-shifting standards, in Decem - ber 2018, the Cayman Islands brought the Interna - tional Tax Co-Operation (Economic Substance) Act (As Revised) and associated regulations and guidance into force. This law introduced reporting and eco - nomic substance requirements for certain Cayman Islands-domiciled entities and partnerships undertak - ing certain activities, with reporting made to the TIA. The economic substance regime incorporates certain exemptions specifically for vehicles that fall within the statutory definition of an investment fund. Data protection The Data Protection Act (As Revised) (DPA) came into force in late 2019. This law imposes certain obliga - tions on Cayman Islands vehicles that handle personal information relating to an individual with respect to that information. The DPA data protection principles are equivalent to those in force under other compara - tive legislation, such as the General Data Protection The Cayman Islands continues to have dialogue with a number of international partners and governing regulatory bodies, including the OECD and the FATF, to ensure that the jurisdiction maintains a robust and proportionate regulatory framework that is imple - mented in an effective manner to meet internationally accepted best practice standards. Impact on offering and subscription documents At the establishment stage, these regulatory mat - ters are being reflected in more detailed disclosures in offering and subscription documents. By way of example, investors are being required to make disclo - sures that pertain to AML and tax transparency con - siderations, and sponsors are addressing data protec - tion and sanctions obligations together with economic Regulation in Europe. Continuing dialogue
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