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CAYMAN - CIMA agrees ESMA MOUs

alden mclaughlin 2

(CNS): In order to ensure that Cayman-based funds can continue to be marketed in the European Union, the country’s regulator has confirmed its intention to sign Memoranda of Understanding with member organisations of the European Securities and Markets Authority (ESMA).

The MoUs relate to the Alternative Investment Funds Management Directive (AIFMD), which will require that certain conditions be met before non-EU countries can market alternative investment funds, such as hedge funds, in the EU. ESMA’s Board of Supervisors approved the signing of the MoUs with CIMA yesterday. The AIFMD is to be implemented across Europe from 22 July. 

The new premier expressed his satisfaction with the signing of the MOUs, as he pointed to the importance of the funds industry to the Cayman economy. “These MoUs will enable the continued marketing of Cayman Islands hedge funds throughout the European Union. Europe is a significant market for us, since approximately 23% of Cayman-regulated fund assets are managed by a European Manager,” Alden McLaughlin said Thursday.

“With the enactment of the Mutual Funds Law, the Cayman Islands has become the leading jurisdiction for funds,” said the new financial services minister, Wayne Panton. “Despite continued volatility in the global financial markets, the Cayman Islands funds industry has performed exceptionally well, with 10,932 funds regulated by CIMA as of 31 March, 2013.  The signing of the MoUs with ESMA members is an important step in maintaining our competitiveness in the European market,” the former off-shore lawyer and financial industry expert said.    

Twenty EU authorities have already signed the MoU with CIMA, in the margins of the meeting of the Board of Supervisors of ESMA on Wednesday. On the same day, the Board of Supervisors of ESMA approved MoUs with 33 other non-EU authorities.

CIMA Managing Director, Cindy Scotland, will sign the MOUs on the Authority’s behalf.  “CIMA has been in discussion with ESMA on the model requirements since early 2012, and we are very pleased that arrangements are being put in place which will enable the Cayman Islands to remain a preeminent jurisdiction for hedge funds,” she said.

Cayman Finace also welcomed the move. "The AIFMD, if not addressed, would pose some challenges for the marketing of Cayman Islands hedge funds in Europe, and we are very happy this step will be taken by CIMA to address concerns and enable the jurisdiction to continue to thrive as a leading funds domicile", said Gonzalo Jalles, CEO of Cayman Finance.

Jalles explained the Cayman Islands continues to reach new markets, and maintaining the jurisdiction's links in Europe is key to the success of various Cayman Islands financial services providers and the wider economy.

"I see this signing as a proactive move and commend CIMA and the other stakeholders who have been working on it," he added.