Exploring the Funds Hub

Epizodes

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  Continuing obligations of a Cayman Islands Registered Mutual Fund 05.08.2026 1h 12min

  This guide sets out the continuing obligations under Cayman Islands law of an open-ended fund registered with the Cayman Islands Monetary Authority (CIMA) under section 4(3) or 4(4)(a) of the Mutual Funds Act (Mutual Funds Act). Part A of this guide sets out the ongoing requirements under the Mutual Funds Act as well the various FATCA and CRS requirements, director registration obligations and anti-money laundering compliance. An open-ended investment fund, registered with CIMA under the Mutual Funds Act, can be structured as an exempted company, limited partnership, limited liability company or unit trust, each of which also have ongoing obligations. Part B applies to a fund that is an exempted company incorporated with limited liability and an authorised share capital. If the fund is an exempted limited partnership see also Part C. If it is a limited liability company (LLC) incorporated under the Limited Liability Companies Act (LLC Act) see also Part D and if it is an exempted trust, see also Part E. Please see our guide to mutual funds in the Cayman Islands for more details of the open-ended fund structures available in the Cayman Islands. CIMA has the power under the Monetary Authority Act (MA Act) to impose significant administrative fines of up to CI$1 million (US$1.2 million) for each breach of certain provisions of the Anti-Money Laundering Regulations (AML Regulations) and other Cayman regulatory laws and regulations, including the Mutual Funds Act, Securities Investment Business Act and Directors Registration and Licensing Act (DRL Act). The level of an administrative fine will depend on various factors including whether the breach is committed by an individual or a body corporate and if the breach is classified as minor, serious or very serious. An overview of the annual compliance dates is set out in our compliance calendar, which can be found here on our website. Note in particular that penalties frequently apply for late filings and so the registered office should be informed promptly of any notifiable changes to allow the appropriate filing/s to be made. Must be paid to CIMA. Fund/Feeder fund CI$4,125/US$5,031 Master fund CCI$3,075/US$3,750 SPC If a fund is structured as a segregated portfolio company an additional annual fee of CI$300/US$366 per segregated portfolio is also payable to CIMA. By 15 January of each calendar year. Penalties under Mutual Funds Act 1/12 of the annual fee due for each month the payment remains outstanding. For a fund which has ceased carrying on business and which has applied to de-register from CIMA half annual fees are payable. For all funds registered under section 4(3), all master funds and for those funds registered under section 4(4)(a) that filed an offering document with CIMA, a copy of amended offering document or supplement to the offering document (or prescribed details for a master fund which does not have an offering document) must be filed with CIMA along with a signed amended application form (if applicable). Offering document/supplement filing fee CI$125/US$153 Application form filing fee CI$300/US$366 Within 21 days of becoming aware of the change. CIMA expects the governing body and operators of registered funds to comply with the corporate governance principles set out in its Rule and Statement of Guidance on Corporate Governance for Mutual Funds and Private Funds issued in 2023 (SoG). The governing body of a regulated fund is the board of directors for a corporate fund, the general partner(s) of an exempted limited partnership, the manager(s) of an LLC and the trustee(s) of a unit trust. The governance structure of any fund will depend on the fund's size, structure, nature of business, risk profile of the operations and complexity. The governing body has responsibility for monitoring and supervising the fund's activities and affairs, including: ensure that they have sufficient and relevant knowledge and experience to carry out their duties (including undertakin...
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  Continuing obligations for private and professional funds The board and officers Functionaries and other service providers Service provider Requirement Is an exemption available? Notice requirements Event triggering an obligation to notify the FSC Time frame Annual regulatory and government requirements Due by date Action Maintenance of records and financial statements Fund policies and arrangements Anti-money laundering obligations Obligations under FATCA and CRS? Beneficial ownership regime 04.08.2026 12min

  As a recognised fund, your professional or private fund is regulated by the British Virgin Islands (BVI) Financial Services Commission (the FSC). This note provides a quick reference to your professional or private fund's ongoing BVI obligations. Professional and private funds are recognised under the Securities and Investment Business Act, Revised Edition 2020 and are subject to the Mutual Funds Regulations, Revised Edition 2020. A professional or private fund must: At all times have at least two directors, at least one of whom must be an individual Appoint an appropriately qualified and independent individual as Money Laundering Reporting Officer (MLRO) for the fund who may, in practice, be a person provided by one of the functionaries to the fund (see below for more detail on anti-money laundering obligations) Appoint a Foreign Account Tax Compliance Act (FATCA) responsible officer and a principal point of contact for the BVI International Tax Authority (ITA)(see below for more detail on obligations under FATCA and CRS) A private or professional fund is required to have the following functionaries and other service providers: Manager A private or professional fund must at all times have a manager. Yes, in certain circumstances, on application to the FSC. Administrator A private or professional fund must at all times have an administrator. No exemption is available. Custodian A private or professional fund must at all times have a custodian. The custodian must be functionally independent from the manager and administrator. Yes, in certain circumstances, on application to the FSC. The most common exemptions are for feeder funds in a "master-feeder" structure and for funds whose prime broker provides the custodial services. Auditor A private or professional fund must appoint and at all times have an auditor to audit its financial statements. Yes, in certain circumstances, on application to the FSC. Authorised Representative A private or professional fund must have an FSC licenced authorised representative (Authorised Representative) to act as a point of contact between the fund and the FSC. No exemption is available. On the happening of certain events, a professional or private fund is required to notify the FSC. The table below summarises these notification requirements and the timeframe for providing notice. The appointment of a functionary (ie the manager, administrator, investment advisor, custodian, any prime broker or (in the case of a unit trust) the trustee). Not less than 7 days prior to the date of appointment. A functionary ceasing to act (notice must include a statement of the reasons for such functionary ceasing to act). Within 7 days. The appointment of a director. Within 14 days. A director ceasing to hold office (for whatever reason). Within 14 days. The appointment of an Authorised Representative. Within 14 days. An Authorised Representative ceasing to hold office (for whatever reason). Within 14 days. The appointment of an auditor. Within 14 days. An auditor ceasing to hold office (for whatever reason). Within 14 days. Any change in the address of the fund's place of business, whether in or outside the BVI. Within 14 days. Any amendment to its constitutional documents. Within 14 days. The issuance of any offering document not previously provided to the FSC. Within 14 days. The amendment of any offering document previously provided to the FSC. Within 14 days. There are various reporting and payment deadlines for a professional or private fund throughout the year. 31 March Pay recognition fee of US$1,200 to the FSC. Failure to pay may attract administrative penalties and/or other enforcement action 30 April For funds that are limited partnerships, pay the Registrar of Corporate Affairs (together with the Registrar of Limited Partnerships, the Registry) licence fee of US$750 31 May FATCA reporting deadline and Common Reporting Standard (CRS) reporting deadline 31 May For funds that are companies incorporated ...
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  Establishing a Hedge Fund in the BVI What factors determine whether a hedge fund must be regulated in the BVI? Which hedge fund product is right for me? What hedge fund structure should I use? What service providers will I need to get started? Investment Manager Administrator Custodian Auditor Authorised Representative I have existing relationships with some service providers but they are not based in the BVI. Can I appoint them to my BVI fund? I am also going to need to set up a new investment management vehicle to manage my BVI fund. Can you assist with that? Any other regulatory obligations I should be thinking about? What fees are payable to the Commission? Application Fee (US$) Annual Fee (US$)** How long will it take to set up my hedge fund? Fund Incorporation/Formation of Company/Partnership Time to Prepare Documentation & Submit Application to Commission 04.08.2026 21min

  Are you thinking of setting up an investment fund in the British Virgin Islands (BVI)? This document provides an overview of the hedge funds industry in the BVI and why it is such an attractive jurisdiction for hedge funds. We explain the regulatory regime in the BVI, the fund structures and fund products available and how we can support you from the initial structuring and planning conversations, all the way through to the launch and ongoing support. The investment funds industry in the BVI is regulated by the Financial Services Commission (the Commission) and the primary legislation which governs the industry is the Securities and Investment Business Act, Revised Edition 2020, as amended (SIBA). This guide focuses on the open-ended hedge fund industry, but it should be highlighted that the BVI has a separate regulatory regime for private equity and other closed-ended funds – these are discussed in a separate legal guide. Do let us know if you would like further details. Generally, an entity will be considered to be a "mutual fund" and will be subject to regulation under SIBA if: It collects and pools investor funds for the purpose of collective investment It is open ended (ie its equity interests are redeemable at the option of its investors) The equity interests that it issues and that are redeemable entitle the holder to receive an amount calculated by reference to the value of a proportionate interest in the whole or a part of the net assets of the fund The BVI benefits from a diverse offering of hedge fund products suited to everyone from the start-up manager setting up an incubator fund to established institutional fund managers with billions under management. Its pragmatic flexibility over the twenty-five years of prudent regulation has actually been a large driver for the popularity it has generated amongst the global investment funds community. The characteristics of the products available are set out below. If you need help choosing the most suitable product for your fund, please contact us. Incubator fund The incubator fund is aimed at emerging managers and allows them a two year incubation or "validity" period (with an extension of up to 12 months available with permission from the Commission) to establish a track record and test its viability. During that period, the fund can operate with light regulation, very limited mandatory service providers and without having to carry out an audit. An incubator fund must remain within the following thresholds: Having no more than 20 investors Each investor, having been invited to invest, must make a minimum initial investment of US$20,000 The net assets of an incubator fund must not at any time exceed US$20 million Before the end of the validity period (or, if earlier, when it exceeds the relevant thresholds for two consecutive months) an incubator fund is required to convert to a private, professional or approved fund. If the fund determines that it is not viable to continue, it is required to wind up its operations. The incubator fund is required to conduct an audit as part of its conversion to a private or professional fund. An incubator fund benefits from a fast track approval process, enabling it to commence business as an incubator fund two business days after submitting a complete application to the Commission. Approved fund The approved fund is aimed at managers looking to establish a fund with a private offering to a small group of investors on a longer term basis. An approved fund is restricted to: Having no more than 20 investors Having net assets which do not at any time exceed US$100 million The approved fund has similar characteristics to the private fund recognised under SIBA, including no minimum initial investment for investors. Unlike the private fund, the approved fund is not required to appoint an auditor. It is also not required to appoint a manager or a custodian, unless it is set up as an SPC (please see below for more details). It is required to a...
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  Establishing a Closed-Ended Fund in the BVI What factors determine whether a closed-ended fund must be regulated in the BVI? The BVI Private Investment Fund Regime What fund structure should I use? What service providers or appointed persons will I need to get started? I have existing relationships with some service providers but they are not based in the BVI. Can I appoint them to my BVI fund? I am also going to need to set up a new investment management vehicle to manage my BVI fund. Can you assist with that? Regulatory considerations What fees are payable to the Commission? Application Fee (US$) Initial Recognition Fee (US$)* Annual Fee (US$) How long will it take to set up my fund? Formation/Incorporation of Partnership/Company Time to Prepare Documentation 04.08.2026 18min

  Are you thinking of setting up a closed-ended investment fund in the British Virgin Islands (BVI)? This document provides an overview of the closed-ended funds industry in the BVI and why the BVI is such an attractive jurisdiction for private equity, venture capital and other closed-ended fund managers. We explain the regulatory regime in the BVI, the fund structures available and how we can support you from the initial structuring and planning conversations, all the way through to the launch and ongoing support. Closed-ended funds in the BVI are regulated by the Financial Services Commission (the Commission). The primary legislation which governs the industry is the Securities and Investment Business Act, Revised Edition 2020, as amended (SIBA), and the Private Investment Funds Regulations, Revised Edition 2020 (the PIF Regulations). This guide focuses on the closed-ended fund industry, but it should be highlighted that the BVI does have a separate regulatory regime for hedge funds and other open-ended funds – these are discussed in a separate legal guide. Do let us know if you would like further details. Generally, an entity will be considered to be a closed-ended fund and will be subject to regulation as a Private Investment Fund (or PIF) if: It collects and pools investor funds for the purpose of collective investment and diversification of portfolio risk, and The equity interests that it issues entitle the holder to receive an amount calculated by reference to the value of a proportionate interest in the whole or a part of the net assets of the fund BVI closed-ended funds falling within the definition of a PIF are generally required to be regulated by the Commission as a PIF. However certain entities, including but not limited to single investor funds, single asset funds, joint venture companies and special purpose acquisition companies do not require regulation as a PIF. The PIF is a flexible, cost-effective and lightly-regulated fund product which is suited for everyone from the start-up manager to established institutional private equity houses with billions under management. The characteristics of the PIF are set out below. Private investment fund Interests in a PIF may be distributed on either a "private" or a "professional" basis. There is no minimum investment amount for a PIF distributed on a private basis. If distributing on a "private" basis the PIF is restricted to either: Having no more than 50 investors or Making an invitation to subscribe for or purchase fund interests on a private basis only If the PIF interests are being distributed on a "professional" basis, they may only be made available to "professional investors" and the minimum initial investment by each professional investor must not be less than US$100,000 (or other currency equivalent), unless the investor is an "exempted investor" in which case there is no minimum initial investment. A professional investor is a person: Whose ordinary business involves, whether for that person's own account or the account of others, the acquisition or disposal of property of the same kind as the property, or a substantial part of the property, of the fund or Who, whether individually or jointly with their spouse, has a net worth in excess of US$1,000,000 (or other currency equivalent) which does include the primary residence An exempted investor means: The manager, administrator, promoter or underwriter of the fund or Any employee of the manager of the fund A PIF is required to issue an offering document or term sheet (although in certain circumstances the Commission can provide an exemption from this requirement). A PIF is required to maintain a clear and comprehensive policy for the valuation of its assets (Fund Property) with procedures that are sufficient to ensure that the valuation policy is effectively implemented. The valuation policy shall: Be appropriate for the nature, size, complexity, structure and diversity of the fund and Fund Property Be consis...
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  Introduction to automatic exchange of information for BVI Investment Funds The legislative framework Funds as investment entities and therefore financial Institutions Reporting financial institutions Registration with the IRS Registration with FARS and the principal point of contact Financial account Identification of reportable accounts Specified persons or reportable persons Reporting to the Tax Information Authority FATCA and non-participating FIs Review of fund documentation 29.07.2026 14min

  This guide provides a high level summary of the main obligations for British Virgin Islands (BVI) investment funds under BVI automatic exchange of information (AEOI) legislation. The BVI Government is a signatory to: A Model 1B intergovernmental agreement with the United States (the IGA) which provides the framework for the implementation of the US Foreign Account Tax Compliance Act (FATCA) in the BVI The Organisation for Economic Co-operation and Development sponsored multi competent authority agreement regarding the new common l reporting standard on automatic exchange of information (CRS, together with the IGA, the AEOI Agreements) As BVI entities are not directly subject to the AEOI Agreements, the key BVI statute in relation to tax information exchange is the Mutual Legal Assistance (Tax Matters) Act, Revised Edition 2020 (MLAT) and the orders made under MLAT (together, the AEOI Legislation). The BVI International Tax Authority (ITA) is the designated competent authority under MLAT and is responsible for matters concerning tax information exchange. The ITA has issued guidance notes (the Guidance Notes) in relation to the IGA which can be found here and in relation to CRS which can be found here. There are differences between the AEOI Agreements which have been replicated in the AEOI Legislation in terms of the definitions and application to the business of any BVI fund. In practice, despite the differences, the majority of BVI investment funds fall within the definition of Investment Entity, under each of the regimes. There will be some very rare exceptions to this rule. Investment Entities are one of the types of financial institution under the AEOI Legislation. Under FATCA, the term "Foreign Financial Institution" is used, but for the purposes of this guide we will refer to FIs or Financial Institutions. The majority of BVI funds will, subject to some very limited exceptions, be Reporting FIs. Reporting FIs are required to comply with registration and reporting obligations imposed under the AEOI Legislation. The most notable obligations are: To report on financial accounts held by specific US persons or individuals or entities resident in certain jurisdictions (Reportable Accounts) To register with the Internal Revenue Service of the United States (IRS) to obtain a global intermediary identification number (GIIN) (even if the Reporting FI has no US Reportable Accounts) either through the IRS FATCA portal or through a paper submission. Registered Deemed Compliant FIs (which are specific low risk FIs that are exempt from full FATCA reporting obligations) are also obliged to register with the IRS. To register with the ITA through its online portal, the BVI "Financial Account Reporting System" (the BVI FARS) To identify Reportable Accounts in accordance with the due diligence requirements set out in the AEOI Agreements, the relevant AEOI Legislation and the Guidance Notes To report annually to the ITA certain specified information with respect to any Reportable Accounts. A BVI fund which is a reporting FI is required by FATCA to register with the IRS within 30 days of "starting business". While a fund is not technically operating until it starts to accept subscription payments from investors, in reality, all funds will have to provide their GIIN numbers to banking and other counterparties at a very early stage of their creation in order to open accounts. It is therefore important to get this registration done as soon as possible after the vehicle has been formed. When registering for a GIIN, the IRS portal requires the name of a natural person to be listed as the FI's responsible officer (RO), despite the fact that under the IGA this role is not mentioned. The application requires the RO to certify that the information provided is accurate and that the BVI fund will comply with its FATCA obligations. The RO should be someone with authority under BVI law to provide the confirmations and submit the information required by ...
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  Ongoing obligations of approved managers Submission of annual returns Provision What to do and when? Renewal fee Provision What to do and when? Payment of Registry fees Provision What to do and when? Preparation and submission of financial statements Provision What to do and when? Directors and authorised representative Provision What to do and when? Anti-money laundering/Countering the financing of terrorism Provision What to do and when? Record keeping Provision What to do and when? Notification of changes Provision What to do and when? Notification of material or significant matters Provision What to do and when? Delegation of relevant business functions Provision What to do and when? Notification of excess assets under management Provision What to do and when? Ceasing to qualify as an Approved Manager and new relevant business Provision What to do and when? 28.07.2026 11min

  The Investment Business (Approved Managers) Regulations, Revised Edition 2020 (the Regulations) and Approved Investment Managers Guidelines (the Guidelines) establish a regime that allows eligible investment managers and advisers to be regulated under a simple approval process and avoid the licensing regime under Part I of the Securities and Investment Business Act, Revised Edition 2020 (SIBA). Regulation 16/Guideline 6.4 An Approved Manager must file an annual return with the Financial Services Commission (the Commission) no later than 31 January each year. The annual return must be in the prescribed form and must contain: 1. A statement that the Approved Manager is not in breach of the requirements of the Regulations 2. A confirmation that each director and senior officer of, and shareholder with a "significant interest" (generally speaking, more than ten per cent) in, the Approved Manager is fit and proper 3. Details, as at 31 December of the preceding year, of: 1. the funds (and persons) for which it provides services 2. the assets under management of each fund (and person) for which it acts 3. the number of investors in each fund for which it acts 4. any significant complaints received by the Approved Manager Regulation 6(2)/Guideline 7.1 An Approved Manager must pay an annual renewal fee of US$1,800 to the Commission by 31 March of each year.* * Ascentium's invoices for disbursements are distributed annually in November and are payable by 15 January. BVI Companies Act 2004 (as amended) For companies incorporated from 1 January to 30 June, pay the Registrar of Corporate Affairs (the Registry) licence fee by 31 May and for companies incorporated from 1 July to 31 December, pay the Registry licence fee by 30 November.* The Registry licence fee is US$550 for companies authorised issue up to 50,000 shares and US$1,350 for companies authorised to issue more than 50,000 shares * Ascentium's invoices for disbursements are distributed annually in November and are payable by 15 January. Regulation 14(1)/Guideline 6.2 An Approved Manager must prepare financial statements for each financial year in accordance with either UK generally accepted accounting principles (GAAP), US GAAP, Canadian GAAP, international financial reporting standards or such other recognised international accounting standards as may be approved by the Commission on a case-by-case basis. The financial statements do not need to be audited Financial statements must be signed by a director and submitted to the Commission within six months of the end of the financial year to which they relate. Such statements must be accompanied by a director's certificate (in the prescribed form) and a report on the affairs of the Approved Manager Regulation 13(1)/Guideline 6.1.1 An Approved Manager must at all times have: 1. At least two directors, at least one of whom shall be an individual (or in the case of a limited partnership, at least one general partner) 2. An authorised representative – this entity acts as the conduit between the Approved Manager and the Commission. An affiliate entity of Ascentium (Craigmuir Authorised Representative Limited) provides this service Anti-Money Laundering Regulations 2008 Anti-Money Laundering and Terrorist Financing Code of Practice 2008 Financial Services (Prudential and Statistical Returns) Order 2009 The BVI anti-money laundering regime applies to all Approved Managers as they are classified as "relevant persons" under the Anti-Money Laundering Regulations, 2008. In summary, an Approved Manager will be required to: 1. Put in place client onboarding procedures which address typical "know your client" requirements in respect of the funds (and persons) that will be clients of the Approved Manager 2. Appoint an officer or another individual as Money Laundering Reporting Officer 3. Report suspicious transactions to the BVI Financial Investigation Agency 4. Put in place documentation, such as a compliance manual, which outlines how the App...
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  Continuing obligations for incubator funds The board and officers Functionaries and other service providers Notice requirements Event triggering an obligation to notify the FSC Time frame Notices in relation to an incubator fund's validity period Annual regulatory and government requirements Due by date Action Reporting and financial statements Anti-money laundering obligations Fund policies and arrangements Obligations under FATCA and CRS Beneficial ownership regime 27.07.2026 12min

  As a mutual fund, your incubator fund is regulated by the British Virgin Islands (BVI) Financial Services Commission (the FSC). This note provides a quick reference to your incubator fund's ongoing BVI obligations. Incubator funds are governed by the Securities and Investment Business (Incubator and Approved Funds) Regulations, Revised Edition 2020 (the Regulations) and the Incubator and Approved Funds Guidelines. An incubator fund must: At all times have at least two directors, at least one of whom must be an individual Appoint an appropriately qualified and independent individual as Money Laundering Reporting Officer (MLRO) for the fund who may, in practice, be a person provided by one of the functionaries to the fund (see below for more detail on anti-money laundering obligations) Appoint a Foreign Account Tax Compliance Act (FATCA) Responsible Officer and a principal point of contact for the BVI International Tax Authority (ITA)(see below for more detail on obligations under FATCA and CRS) An incubator fund is required to have an FSC licenced authorised representative (Authorised Representative) at all times to act as a point of contact between the fund and the FSC. This is a service offered by our strategic alliance partner, Craigmuir Authorised Representative Limited. It is not required to have any other functionaries or service providers, although it is free to appoint them should it wish to. On the happening of certain events, an incubator fund is required to notify the FSC. The table below summarises these notification requirements and the timeframe for providing notice. An Authorised Representative ceasing to hold office (for whatever reason) Immediately Any change to the information provided to the FSC with the application ie: change of Authorised Representative; change of director or general partner or to any details provided in relation to a director or general partner; amendment to constitutional documents; amendment to offering document (if applicable); and/or change to investment warning and/or description of investment strategy (where there is no offering document) Within 14 days Total number of investors exceeds the threshold for two consecutive months Within 7 days of the end of the second month Maximum value of the fund's assets exceeds the threshold for two consecutive months Within 7 days of the end of the second month Any matter related to the conduct of the business activities of the fund which may have a material impact on the fund (for example a suspension of subscriptions or redemptions or becoming subject to legal or regulatory proceedings) Immediately Number of directors falls below two (for whatever reason) Immediately The initial period of validity of an incubator fund is two years. If an incubator fund wishes to extend its period of validity for a period not exceeding 12 months, it must submit a written application to the FSC requesting the extension at least one month prior to the end of its period of validity (or such shorter period as the FSC may approve). If an incubator fund wishes to continue to operate after the end of the validity period, it must submit to the FSC an application to convert into a private, professional or approved fund at least two months prior to the expiry of the validity period (or such shorter period as the FSC may approve). If the incubator fund is applying to convert to a private or professional fund, it must also prepare and submit to the FSC an audit of its current financial position and compliance with the requirements of the Regulations at least two months prior to the expiry of the period of validity. There are various reporting and payment deadlines for an incubator fund throughout the year. 31 January File semi-annual return in respect of previous six months with the FSC 31 January Submit a statement that the fund is not in breach of the requirements of the Regulations 31 March Pay approval fee of US$1,200 to the FSC. Failure to pay may attract administrat...
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  Continuing obligations for approved funds The board and officers Functionaries and other service providers Notice requirements Event triggering an obligation to notify the FSC Time frame Annual regulatory and government requirements Due by date Action Reporting and financial statements Anti-money laundering obligations Fund policies and arrangements Obligations under FATCA and CRS Beneficial ownership regime 27.07.2026 11min

  As a mutual fund, your approved fund is regulated by the British Virgin Islands (BVI) Financial Services Commission (the FSC). This note provides a quick reference to your approved fund's ongoing BVI obligations. Approved funds are governed by the Securities and Investment Business (Incubator and Approved Funds) Regulations, Revised Edition 2020 (the Regulations) and the Incubator and Approved Funds Guidelines. An approved fund must: At all times have at least two directors, at least one of whom must be an individual Appoint an appropriately qualified and independent individual as Money Laundering Reporting Officer (MLRO) for the fund who may, in practice, be a director of the fund itself or a person provided by one of the functionaries to the fund (see below for more detail on anti-money laundering obligations) Appoint a Foreign Account Tax Compliance Act (FATCA) Responsible Officer and a principal point of contact for the BVI International Tax Authority (ITA)(see below for more detail on obligations under FATCA and CRS). An approved fund is required to have an administrator at all times. It is also required to have an FSC licenced authorised representative (Authorised Representative) at all times to act as a point of contact between the fund and the FSC. This is a service offered by our strategic alliance partner, Craigmuir Authorised Representative Limited. It is not required to have any other functionaries or service providers, although it is free to appoint them should it wish to. On the happening of certain events, an approved fund is required to notify the FSC. The table below summarises these notification requirements and the timeframe for providing notice. A change of administrator Immediately An Authorised Representative ceasing to hold office (for whatever reason) Immediately Any change to the information provided to the FSC with the application ie: change of Authorised Representative; change of director or general partner or to any details provided in relation to a director or general partner; amendment to constitutional documents; amendment to offering document (if applicable); and/or change to investment warning and/or description of investment strategy (where there is no offering document) Within 14 days Total number of investors exceeds the threshold for two consecutive months Within seven days of the end of the second month Maximum value of the fund's assets exceeds the threshold for two consecutive months Within seven days of the end of the second month Any matter related to the conduct of the business activities of the fund which may have a material impact on the fund (for example a suspension of subscriptions or redemptions or becoming subject to legal or regulatory proceedings) Immediately Number of directors falls below two (for whatever reason) Immediately There are various reporting and payment deadlines for an approved fund throughout the year. 31 January File annual return in respect of previous year ending 31 December with the FSC 31 March Pay approval fee of US$1,200 to the FSC. Failure to pay may attract administrative penalties and/or other enforcement action 30 April For funds that are limited partnerships, pay the licence fee of US$750 to the Registrar of Limited Partnerships (together with the Registrar of Corporate Affairs, the Registry) 31 May FATCA reporting deadline and Common Reporting Standard (CRS) reporting deadline 31 May For funds that are companies incorporated from 1 January to 30 June, pay the Registry licence fee* 1 June Pay annual enrolment fee of US$185 to the ITA through the ITA's online portal By the date six months after the end of its financial year (30 June assuming financial year end is 31 December) Provide a copy of the fund's financial statements (which do not need to be audited) to the FSC Pay annual enrolment fee of US$185 to the ITA through the ITA's online portal 30 September CRS additional information form filing deadline 30 November For funds that are companies ...
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  The BVI's quiet role in ESG-linked fund structures: substance, speed, and strategic value Addressing the perception problem directly Where the BVI fits in the ESG fund ecosystem Three structural scenarios in practice Scenario 1: BVI feeder into a Cayman ESG master fund Scenario 2: BVI limited partnership as a co-investment vehicle Scenario 3: BVI company as an impact SPV with UNPRI-aligned reporting What institutional investors actually require When the BVI is — and is not — the right choice A pragmatic tool in a sophisticated toolkit 20.07.2026 8min

  The BVI is not the top-level vehicle in an ESG fund, but it plays a valuable role at the layer beneath, as a feeder fund, co-investment vehicle, or impact SPV, where speed, simplicity, and cost matter. Institutional ESG investors do not categorically exclude BVI vehicles; eligibility is driven by the structure's conduct, governance, transparency, and reporting, not the jurisdiction alone. Used for the right purpose, with robust reporting and UNPRI-aligned governance, the BVI is a pragmatic and credible component of a sophisticated ESG fund toolkit. The British Virgin Islands is sometimes met with scepticism in ESG conversations, largely because of its long association with tax efficiency and confidentiality. That reaction is understandable, but it conflates two distinct questions: whether a jurisdiction is inherently incompatible with ESG objectives, and whether a particular structure is governed and operated in accordance with an appropriate standard. The more useful question is the second, because it is the conduct of a structure, not its domicile alone, that investors and regulators ultimately test. The BVI of today also operates economic substance requirements and a beneficial ownership regime, which narrows the gap between perception and present-day reality. This article offers a balanced, evidence-based view of how BVI vehicles are actually used in ESG-linked fund architectures, and of where they add genuine value and where they do not. In multi-jurisdictional fund structures, the BVI rarely sits at the very top. The primary, investor-facing ESG fund and the general partner are typically established in the Cayman Islands, which remain the dominant master fund and GP jurisdictions for ESG mandates. The BVI's value lies at the structural layer beneath, as feeder funds, co-investment vehicles and special purpose entities that connect capital to the master structure quickly and economically. This division of roles is deliberate: each layer is chosen for what it does best, and the BVI earns its place by doing a narrow set of things efficiently. Understood this way, the BVI is not a rival to Cayman or to onshore frameworks, but a complementary tool deployed for defined, practical purposes. The clearest way to assess the BVI's role is to look at the structures in which it is actually used. A common pattern uses a BVI feeder to aggregate capital from a specific investor category before deploying into a Cayman ESG master fund. The speed of incorporation and low ongoing maintenance costs make the BVI an efficient choice here, particularly when a manager needs to stand up a feeder quickly to meet a closing. Because the ESG policy, reporting framework and investment mandate are set at the master level, the feeder inherits that discipline while keeping the legal wrapper lightweight. For investors with particular regulatory or tax treatment, a dedicated feeder also keeps their participation cleanly ring-fenced from other capital. For an infrastructure ESG deal, a BVI limited partnership can serve as a co-investment vehicle alongside the primary fund. Co-investments are frequently one-off or deal-specific, so a lightweight, cost-efficient wrapper is usually preferable to an onshore alternative that carries heavier regulatory overhead. Establishing a bespoke onshore fund for a single asset would rarely be proportionate, whereas a BVI LP can be formed and wound up in line with the life of the deal. The partnership can be tailored to the particular transaction while still incorporating the ESG terms agreed with co-investors. A BVI company can be structured as a clean SPV for impact investments, with ESG reporting built directly into its governance framework rather than added afterwards. Constitutional documents and board mandates can require periodic impact reporting, and the vehicle can be aligned with UNPRI or an equivalent framework from the outset. Where investors want assurance, those reporting obligations can be made contractuall...
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  Private credit in Luxembourg: structuring considerations for a fast-growing strategy Luxembourg's private credit landscape: why the domicile matters Choosing the right vehicle: RAIF, SIF and the SCSp AIFMD II: what the loan-originating fund rules mean in practice Liquidity structuring: matching terms to assets Pre-launch checklist: structuring questions to resolve before you launch Conclusion 13.07.2026 8min

  Private credit has moved from the margins to the mainstream of European finance, and Luxembourg has become the domicile of choice for the managers raising and deploying it. As bank lending has retrenched and institutional investors have pursued the credit risk premium, European private credit assets under management have grown rapidly, and a growing share of new direct lending, mezzanine and credit opportunities vehicles is now structured through Luxembourg. This article is not about the asset class: you already know what private credit is. It is about the structuring decisions that determine whether a Luxembourg private credit fund is built for success. AIFMD II has reshaped the rules for loan-originating funds, and the choices you make on vehicle, leverage, diversification and liquidity before launch will shape both how quickly you reach the market and how smoothly the fund runs once it is there. Luxembourg's dominance in private credit is not an accident of marketing. It rests on a stable regulatory environment overseen by the CSSF, an extensive network of double tax treaties, deep service-provider expertise in credit strategies, and a level of investor familiarity that shortens the diligence conversation. For managers, that combination means fewer surprises and a structuring toolkit that allocators already understand and trust. The practical result is volume. The RAIF, the SIF, and the SCSp are all used at scale for credit strategies, often combined within a single structure. This acceleration has been driven by bank retrenchment and by sustained institutional appetite for the credit risk premium, and the momentum behind Luxembourg fund structuring under AIFMD II shows little sign of slowing. Vehicle selection is not a formality. The RAIF, the SIF and the SCSp each serve distinct purposes, and the right choice turns on your manager profile, your investor base and the strategy you are running. The central trade-off between the RAIF and the SIF is speed against regulatory status. The RAIF is not subject to direct product supervision by the CSSF, relying instead on a fully authorised AIFM, which makes it considerably faster to bring to market. The SIF is itself regulated by the CSSF, and direct product oversight can be decisive when particular investors, mandates, or strategies require a product-regulated wrapper. For most managers prioritising time-to-market, the RAIF is the natural default; the SIF earns its place where the investor base values direct regulatory status. The SCSp, the Luxembourg special limited partnership, has become the preferred structural form for many credit managers. Its contractual flexibility and tax transparency make it especially familiar to US and UK LP investor bases accustomed to limited partnership structures, and it can serve as the fund vehicle itself with RAIF or SIF regulatory overlay. In practice, the comparison comes down to three points: RAIF: fastest route to market and not directly product-regulated but requires an authorised AIFM; well-suited to managers prioritising speed. SIF: directly regulated by the CSSF and slower to launch, but advantageous where investors or strategies value product-level supervision. SCSp: a tax-transparent partnership offering maximum contractual flexibility, and the form most familiar to US and UK LPs. If you are structuring a loan-originating fund, AIFMD II is now the starting point rather than an afterthought. The loan-originating fund (LOF) regime is triggered when a fund originates loans and introduces a set of hard constraints that must be built in from the outset rather than retrofitted once terms are agreed. The headline constraints fall on leverage and concentration. Open-ended LOFs are capped at 175 per cent leverage and closed-ended LOFs at 300 per cent. LOFs must also meet diversification requirements, with exposure to any single borrower generally limited to 20 per cent of the fund's capital, and originators are subject to risk retention rule...
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  AIFMD II and the UCITS review: what EU reform means for global fund managers Introduction: The stakes of EU reform for global managers What AIFMD II actually changes and for whom Delegation and substance: the reforms that matter most Loan-originating funds: new rules, new obligations Liquidity management tools: an expanded toolkit with new responsibilities Reporting obligations: what has changed and what is coming Stricter requirements regarding national private placement rules What managers should be asking their advisers now 09.07.2026 12min

  AIFMD II (Directive (EU) 2024/927) is in force, with national transposition due by 16 April 2026, and the UCITS review is following closely behind. For global managers using Luxembourg as their EU gateway, the practical impact is concentrated in four areas: tighter delegation and substance expectations, a new regime for loan-originating funds, mandatory liquidity management tools for open-ended funds, and expanded reporting. Managers who reassess their delegation model, substance footprint and fund documentation early will protect their EU market access and avoid costly retrofitting later. For managers who reach European investors through Luxembourg, AIFMD II and the UCITS review are not abstract EU technicalities; they reshape how funds are structured, delegated and operated. Luxembourg's passporting advantage has always rested on a simple proposition: a properly authorised manager can market across the EU from a single domicile. That advantage is now only as strong as a manager's ability to satisfy tightening substance and delegation expectations. The headline position is straightforward. AIFMD II is in force, with Member States required to apply the new rules from April 2026, and the UCITS Directive has been amended in parallel; a broader UCITS review is expected to follow closely. For managers in the UK, US, Switzerland and Asia, the practical question is no longer whether to engage, but how quickly. This piece sets out what has changed, what remains in transition, and what it means for managers operating from outside the EU. AIFMD II (Directive (EU) 2024/927) amends both the AIFMD and the UCITS Directive. It entered into force in April 2024, and Member States, including Luxembourg, must transpose it into national law by 16 April 2026. In practice, the Commission de Surveillance du Secteur Financier (CSSF) will give effect to the regime through national legislation and supplementary circulars, with certain technical standards still to be finalised by ESMA. The timeline matters as much as the content: some obligations bite on transposition, while others phase in or await regulatory technical standards (RTS). The scope is broad but uneven. The reforms affect all AIFMs to some degree through delegation, substance, and reporting. Still, the most consequential changes are concentrated in loan origination, liquidity management tools (LMTs) for open-ended funds, and the delegation model used by non-EU managers. The UCITS review runs on a separate track. The liquidity provisions have been aligned with AIFMD II through the same directive. Still, the wider UCITS VI agenda, covering issues such as eligible assets, remains at an earlier, consultative stage. Managers should treat the two as related but distinct. For most global managers, this is the section that matters. AIFMD II preserves the delegation model; a Luxembourg AIFM can still delegate portfolio management to a manager in London, New York, Zurich or Singapore, but it raises the bar on transparency and accountability. Regulators now expect a clear, documented view of the entire delegation chain: where functions sit, who performs them, and how they are supervised. Delegation reporting is expanded, and ESMA will conduct peer reviews to ensure that letterbox entities do not slip through the cracks. Substance is the other side of the same coin. A Luxembourg AIFM must demonstrably perform the functions it is authorised for, with at least two senior persons conducting its business in the EU on a full-time basis. It can no longer present a lean local presence while substantive work is done elsewhere, without that arrangement attracting scrutiny. For a US- or Asia-based manager acting as delegated portfolio manager of a Luxembourg AIFM, the message is clear: the local entity needs genuine decision-making capability, robust oversight of delegates, and the resources to match. The CSSF and ESMA are drawing firmer lines here, although precisely how far substance expectations extend c...
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  BVI Open-Ended Funds and Approved Funds: Structures, benefits and approval process What are BVI investment funds? What is a BVI-approved fund? Key benefits of investing in BVI funds and approved funds Regulatory requirements for setting up a BVI fund How to obtain approval for a BVI fund: step-by-step process 1. Appoint legal counsel and key service providers 2. Determine the fund structure and category 3. Incorporate the fund vehicle 4. Prepare the offering documents (or disclosure) 5. Submit the application to the FSC 6. FSC review and approval Typical timeline for BVI fund approval BVI hedge funds: the five fund categories How Harneys can help 06.07.2026 15min

  The British Virgin Islands is one of the world's leading jurisdictions for the formation of investment funds. With a well-established regulatory framework, tax-neutral environment and efficient approval processes, the BVI offers a compelling platform for fund managers — particularly those launching their first fund or structuring vehicles below US$100 million. This guide explains the key open-ended hedge fund categories available in the BVI, the benefits they offer, the regulatory requirements involved and the step-by-step process for obtaining fund approval. A BVI investment fund is a pooled investment vehicle incorporated or established in the British Virgin Islands that collects capital from investors and deploys it in accordance with a defined investment strategy. BVI funds are regulated under the Securities and Investment Business Act, 2010 (Revised) (SIBA) and overseen by the BVI Financial Services Commission (FSC). BVI funds can be structured as companies (the most common form), limited partnerships or unit trusts, offering flexibility to match the preferences of both managers and investors. Under SIBA, investment funds fall into five recognised categories: incubator funds, approved funds, private funds, professional funds and public funds. Each category has different investor eligibility thresholds, minimum investment requirements, regulatory obligations and validity periods, allowing managers to select the structure that best suits their fundraising strategy and investor base. Incubator funds and approved funds are particularly suited to emerging managers with assets under management below US$20 million and US$100 million, respectively. An approved fund is a category of BVI investment fund designed for emerging managers seeking a cost-effective regulated fund structure with light ongoing obligations. Unlike professional or private funds, approved funds benefit from a fast-track approval process — enabling them to start business two business days after submitting a complete application to the FSC. To qualify as an approved fund, the vehicle must have no more than 20 investors and net assets not exceeding US$100 million. There is no minimum initial investment requirement. The approved fund must appoint an administrator and a BVI-authorised representative, but is not required to appoint an investment manager, custodian, or auditor. The approved fund category is particularly popular with emerging managers who want a regulated fund product with lighter ongoing obligations and lower costs than private or professional funds, while benefiting from an unlimited validity period. The BVI offers several practical advantages for both fund sponsors and investors. Understanding these benefits helps explain why the jurisdiction remains a top choice for global fund formation. Tax neutrality. BVI funds are not subject to income tax, capital gains tax, withholding tax or stamp duty in the BVI, allowing returns to flow to investors without an additional layer of jurisdiction-level taxation. Regulatory credibility. Funds regulated under SIBA and supervised by the FSC benefit from a recognised and respected regulatory framework. This can be an important factor for institutional investors conducting due diligence on offshore vehicles. Speed and efficiency. The BVI approval process is well-established and, with proper preparation, fund approvals can typically be obtained within a matter of weeks rather than months. This allows managers to move quickly from structuring to fundraising. Structural flexibility. BVI law permits funds to be structured as companies, limited partnerships, or unit trusts, with wide latitude in governance arrangements, share classes, fee structures, and investor rights. This flexibility is especially valuable for managers with bespoke strategies or non-standard investor arrangements. Cost effectiveness. Compared with many onshore jurisdictions, the costs of incorporating, licensing and maintaining a BVI fund are co...
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  Duties and obligations of a director of a Cayman Islands fund 02.07.2026 48min

  This guide provides an overview of the powers, duties and obligations of a director of an exempted company incorporated under the Companies Act of the Cayman Islands (Companies Act) which is registered with the Cayman Islands Monetary Authority (CIMA) as a fund (Fund). This guide is limited to those Funds registered with CIMA under section 4(3) or 4(4)(a) of the Mutual Funds Act (a Mutual Fund) and those Funds registered with CIMA under the Private Funds Act (a Private Fund) as well as the law and practice of the Cayman Islands. Other duties, obligations and potential liabilities may also arise under the laws of other jurisdictions. There is no precise definition of a 'director' under Cayman Islands law. The directors of a Fund may be individuals or corporate bodies and they are the persons with ultimate responsibility for the management and conduct of the Fund's affairs. The first directors of a Fund (whether described as 'executive' or 'non-executive') are typically appointed by the initial subscribers to the Fund or otherwise in accordance with the articles of association of the Fund (Articles). The register of directors maintained by the Fund will be prima facie evidence of the identity of the directors from time to time. A person undertaking the activities of a director without being formally appointed may be found to be acting as a 'de facto director'. Also, if the duly appointed directors of a Fund are found to be acting in accordance with the directions or instructions of another person then that person may be found to be acting as a 'shadow director'. A person is not deemed to be a shadow director however by reason only that the directors act on advice given by such person in a professional capacity, so that an investment adviser of a Fund making recommendations to the directors as to the purchase or sale of investments should not usually constitute a shadow director. Executive directors, non-executive directors, shadow directors and de facto directors are all subject to the duties and obligations set out in this guide. When deciding whether or not to act as a director of a Fund, the following points should be considered: Who will be the other directors of the Fund? Will your fellow directors have the ability to work with you to properly coordinate the proper oversight and management of the Fund? Any other interests you may have in the overall structure of the Fund and its advisers or service providers. If you are a connected person (for example, a principal of the Fund's investment manager) you may want to consider either not sitting on the board of the Fund or making sure that you are in a minority position. These measures will reduce the potential for conflicts of interest to arise which could increase the risk of your actions later being challenged by the investors of the Fund as not being in accordance with your duties to the Fund. The expectations of the Fund's key investors. They may be comfortable with a board of directors comprised of connected persons or they may require the Fund to have one or more directors independent of the Fund's investment manager. This is something that you may wish to discuss further with the Fund's representatives and the Fund's current or proposed key investors before agreeing to accept any appointment as a director. You need to have sufficient and relevant knowledge and experience to discharge your duties as a director. It is up to you to acquire and maintain sufficient knowledge to enable you to carry out your role. You should use the Fund's professional advisers to provide advice on any areas or transactions of which you are unsure. In particular, you should ensure that you are able to properly read and understand the financial information relating to the Fund, including its financial statements. If there is anything that you do not understand, then you should promptly obtain professional advice. Whether the Fund has in place, or will be obtaining, any directors and officers ...
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  Data Protection for Cayman Islands investment funds 01.07.2026 6min

  The Cayman Islands Data Protection Act (the DP Act) governs how a data controller may process, use and retain personal data. Anyone who falls within the definition of a "data controller" (such as a Cayman Islands investment fund) must now comply with eight data protection principles in relation to any personal data processed by the data controller. Where a data controller engages a third party (such as an administrator or investment manager) to process personal data on its behalf, the data controller must ensure the third party complies with the eight data protection principles. In addition to governing how a data controller processes, uses and retains personal data, the DP Act also sets out the rights of individuals to control their personal data and implements a system to protect against the misuse of personal data. The DP Act is similar to the General Data Protection Regulation (GDPR) of the European Union with which many clients will be familiar. For a general overview of the Cayman Islands DP Act please see our guide to data protection in the Cayman Islands. In order for investors to invest in an investment fund they must provide certain personal identifying information to the investment fund. Even where the investor is an entity, personal identifying information of contact persons, beneficial owners, directors, employees, partners or members of that entity will be provided to the investment fund. This personal information will be considered personal data under the DP Act. The individual to which the personal data relates does not need to be in the Cayman Islands or a citizen of the Cayman Islands in order for the DP Act to apply. Any investment fund structured as a Cayman Islands company or partnership, or any foreign company registered in the Cayman Islands that acts as a general partner of an investment fund will be subject to the DP Act and will be a data controller. As a data controller, an investment fund must ensure that it complies with the eight data protection principles when it processes any personal data. It must also ensure that any third party that processes personal data on its behalf also complies with the eight data protection principles. Cayman Islands investment funds must: send a privacy notice to existing investors update their subscription documents to include a privacy notice for new investors as well as obtain certain acknowledgements, representations and warranties update offering documents to reflect the requirements under the DP Act update agreements with any third parties that process personal data on behalf of the investment fund to ensure such processing is undertaken in compliance with the DP Act especially where there is transfer of data outside of the Cayman Islands If the investment fund is already subject to GDPR then the investment fund may have already adopted a GDPR compliant privacy notice. If that is the case, then a few minor amendments to the privacy notice to reflect the DP Act are all that are needed. If the investment fund has not yet adopted a privacy notice then it should prepare one in order to communicate the required information to its investors. In either case the privacy notice should be sent to existing investors and/or made available on an investor or fund administration portal. The subscription agreement of the investment fund will also need to be updated to include the privacy notice and certain acknowledgements from the investor. It should also contain representations and warranties from entity investors that they have provided the privacy notice to any person whose data is given to the investment fund (eg beneficial owners, directors etc) and may need to also contain consent provisions for specific activities prescribed under the DP Act, such as the processing of sensitive personal data if applicable. Offering documents should be updated to include a brief disclosure and overview of the DP Act. If no update to the offering documents is scheduled or the investmen...
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  The roles and responsibilities of the AML Officers of Financial Service Providers 30.06.2026 14min

  This guide looks at the roles and responsibilities of the nominated officers of financial service providers whose job it is to look out for and report suspicious activity and who oversee the compliance function and ensure that adequate systems and controls are in place to comply with the Anti-Money Laundering Regulations. Money laundering is the process by which the proceeds of crime are channelled through the economy/financial system in a way which is intended to conceal the true origin and ownership of the proceeds of criminal activity. The Proceeds of Crime Act (the PC Act), the Terrorism Act and the supporting Anti-Money Laundering Regulations (the Regulations) are the main pieces of legislation in the Cayman Islands aimed at combating money laundering, proliferation financing and terrorist financing. Under these laws, those persons carrying out "relevant financial business" (referred to as financial service providers or FSPs) must apply a risk based approach to anti-money laundering, proliferation financing and terrorist financing (together, AML) compliance. Nominated officers - money laundering reporting officer and deputy The PC Act requires that FSPs have a "nominated officer" in place for the purpose of receiving reports relating to criminal conduct, with the Regulations creating the roles of the Money Laundering Reporting Officer (MLRO), Deputy Money Laundering Officer (DMLRO) and AML Compliance Officer (AMLCO). Accordingly, natural persons must be appointed as the MLRO, DMLRO and AMLCO for all FSPs, including investment funds. The Regulations and guidance notes on the prevention and detection of money laundering and terrorist financing in the Cayman Islands (and amendments) (Guidance Notes) published by the Cayman Islands Monetary Authority (CIMA) set out more details on each of these roles and functions. Who can be appointed as MLRO? Under the Regulations each person carrying out relevant financial business must designate a person at management level as their MLRO, to whom suspicious activity reports (SARs) must be made. The MLRO should be someone who is well versed in the business of the FSP which may give rise to opportunities for money laundering, proliferation financing or terrorist financing. A DMLRO must also be appointed to perform the MLRO's functions in their absence. The DMLRO should be a staff member of similar status and experience as the MLRO. The Guidance Notes provide that the MLRO should: Be a natural person Be autonomous, meaning the MLRO is the final decision maker as to whether to file a SAR Be independent, meaning no vested interest in the underlying activity Have access to all relevant material in order to make an assessment as to whether an activity is or is not suspicious What is the role of the MLRO? The primary duties of the MRLO (or the DMLRO in their absence) are to: Receive reports of any information or other matter which comes to the attention of a person carrying out relevant financial business, which gives rise to an actual knowledge or suspicion of money laundering, proliferation financing or terrorist financing Consider and investigate such reports in light of all other relevant information to determine if the information or other matter gives rise to such knowledge or suspicion Have access to other information which may assist in considering such report Make prompt disclosures to the Financial Reporting Authority (FRA) in the standard SAR form if after considering a report there is knowledge or a suspicion of money laundering, proliferation financing or terrorist financing Establish and maintain a register of money laundering, proliferation financing or terrorist financing reports made by staff Maintain a register of reports to the FRA How do we identify unusual or suspicious transactions? As the types of transactions which may be used by money launderers are unlimited it is difficult to define a suspicious transaction. The Guidance Notes are instructive in that they differentia...
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  Private Funds in the Cayman Islands 30.06.2026 26min

  The Cayman Islands is the leading jurisdiction for the offshore investment funds industry due to its combination of flexible and appropriate regulation, an approachable and effective regulator, professional service provider expertise, high reputation among investors and a tax neutral regime. Investment funds established in the Cayman Islands fall into two broad categories: open-ended funds and closed-ended funds. Open-ended funds provide investors with voluntary redemption or repurchase rights and closed-ended funds do not provide investors with those rights. Typically, open-ended funds will invest in liquid assets which can be readily realised to satisfy redemptions (eg listed, liquid, tradable securities) and closed-ended funds will invest in non-liquid assets requiring time to liquidate/realise value (eg real estate, unlisted companies). This guide sets out a summary of the regulatory regime that governs closed-ended investment funds, known as private funds, which is supervised by the Cayman Islands Monetary Authority (CIMA). For an overview of the regulatory regime that governs open-ended investment funds please see our guide to mutual funds in the Cayman Islands. Exempted limited partnerships An exempted limited partnership (ELP) is the most common vehicle for closed-ended funds including private equity, venture capital and real estate funds. An ELP has many similarities to its Delaware equivalent vehicle but an ELP is not a separate legal person and for this reason, it is popular with managers and investors in a number of jurisdictions. An ELP is operated and managed by its general partner. Please see our guide to ELPs for more details. Limited liability companies Limited liability companies (LLCs) can be incorporated in the Cayman Islands in a form closely aligned to the Delaware LLC. LLCs may be used in investment fund structures where a flexible structure similar to a limited partnership is required, but where the vehicle needs to be established as a body corporate distinct from its members. LLCs are regulated by their LLC agreement and the Limited Liability Companies Act. Please see our guide to LLCs for more details. Companies Exempted companies limited by shares are also used for the establishment of closed-ended investment funds, with an investor's liability being limited to the amount paid or agreed to be paid in respect of their shares. Please see our guide to exempted companies for more details. Segregated portfolio companies An exempted company may register as a segregated portfolio company (SPC), which is similar to a segregated cell company in many other jurisdictions. An SPC may establish any number of segregated portfolios. Assets and liabilities attributed to a particular segregated portfolio are legally separated from the assets and liabilities attributed to any other segregated portfolio. A creditor who is party to a contract involving a particular segregated portfolio will have restricted recourse and will be entitled to recover only against assets attributed and credited to the specific segregated portfolio to which the contract is also attributed. SPCs can be useful as multi-strategy vehicles and platform vehicles. Savings by using multi-strategy SPCs are often not as great as anticipated however and SPCs with multiple segregated portfolios do require a greater degree of care to ensure assets are properly segregated, contracts are entered into on behalf of the correct segregated portfolio and inadvertent cross-collateralisation does not occur. Please see our guide to segregated portfolio companies for more details. Unit trusts Cayman Islands unit trusts are established under and governed by the Cayman Islands Trusts Act and, save as modified under that law, generally applicable principles of English trust law. With a unit trust, investors contribute funds to a trustee which holds those funds on trust for the investors and each investor is directly entitled to a pro rata share in the trust's assets...
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  The Funds Download - PRC securities access in 2026, from market entry channels to next generation ETF products 25.06.2026

  In this episode of The Funds Download, Stéphane is joined by Claire Chan, Executive Director and Head of Legal and Compliance at China AMC in Hong Kong, to discuss the evolving landscape of PRC inbound investment and what it means for investors accessing China today. Together, they explore shifting investor appetite, key access channels through Hong Kong, the changing regulatory environment, and what may lie ahead for the market.
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  PRC securities access in 2026, from market entry channels to next generation ETF products 25.06.2026

  Click here to subscribe to the Funds Download podcast. Choose your preferred platform from the list presented and click subscribe or follow once logged in. Visit the Funds Download podcast page to catch up on all the Funds Download episodes. If you're considering establishing a fund in the Cayman Islands, Luxembourg, or the British Virgin Islands, visit our Funds Hub for guidance.
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  SFDR Article 6 funds What is an SFDR Article 6 fund? Where are SFDR Article 6 funds commonly established? How Article 6 differs from SFDR Articles 8 and 9 Interaction between SFDR and non-EU fund structures How Harneys can help 16.06.2026 11min

  The Sustainable Finance Disclosure Regulation (SFDR) is one of the most consequential pieces of EU financial regulation to emerge in recent years. It establishes a classification framework for financial products based on their sustainability characteristics, dividing them broadly into three categories under Articles 6, 8 and 9. While much of the market's attention has focused on the higher-tier classifications - Article 8 (products that promote environmental or social characteristics) and Article 9 (products with sustainable investment as their objective) - the reality is that the vast majority of funds in the market sit within Article 6. This article explains what an SFDR Article 6 fund is, where they are typically established, how they differ from Articles 8 and 9 products, and how SFDR interacts with non-EU fund structures - a question of particular significance for managers domiciling funds in offshore jurisdictions such as the Cayman Islands, the British Virgin Islands and Bermuda. An SFDR Article 6 fund is a financial product that does not promote environmental or social characteristics (Article 8) and does not have sustainable investment as its objective (Article 9). In practical terms, Article 6 is the default classification: any fund that does not make specific ESG commitments in its investment process falls within this category. Article 6 does not mean a fund ignores sustainability risks entirely. Under Article 6(1) of the SFDR, managers of Article 6 products must still disclose the manner in which sustainability risks are integrated into their investment decisions, or explain why sustainability risks are not considered relevant. This is a disclosure obligation, not an investment mandate — the fund is not required to adopt any ESG strategy, but it must be transparent about its approach. Article 6 funds must also comply with pre-contractual disclosure requirements under Article 6(2), including a statement in offering documents on whether and how the product considers principal adverse impacts (PAIs) on sustainability factors. Where PAIs are not considered, an explanation must be provided. A common misconception is that Article 6 funds are "non-ESG" or sit outside the SFDR framework. This is incorrect. Every financial product offered by an EU-regulated financial market participant falls within the scope of the SFDR and must be classified. Article 6 is simply the baseline category for products that do not make affirmative ESG commitments beyond the minimum disclosure requirements. Article 6 funds are established across a wide range of jurisdictions, both within and outside the EU. The SFDR classification itself does not dictate where a fund must be domiciled - it is a disclosure regime that applies to the manager (or, more precisely, to the financial market participant making the product available), not to the fund vehicle itself. Within the EU, Article 6 funds are commonly structured in Luxembourg, the largest European fund domicile. Luxembourg offers well-established regulatory frameworks and is home to the majority of UCITS and EU-regulated alternative investment funds. Many managers without an ESG-specific strategy will establish their funds in Luxembourg and classify them as Article 6 funds by default. Outside the EU, a significant number of funds that are classified as Article 6 — or that would be classified as such if marketed into the EU — are domiciled in offshore jurisdictions. The Cayman Islands remains the dominant global fund domicile for alternative investment funds, particularly hedge funds, private equity vehicles and venture capital structures. The British Virgin Islands and Bermuda are also well-established fund jurisdictions. These offshore fund structures do not fall directly within the scope of the SFDR, but SFDR classification becomes relevant when the fund is marketed to EU investors by an EU-regulated manager or distributor, or where a non-EU manager delegates to or is managed by an EU-regulat...
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  AIFMD explained: scope, thresholds, exemptions and compliance 10.06.2026 14min

  The Alternative Investment Fund Managers Directive (AIFMD) is the cornerstone of EU regulation for managers of non-UCITS investment funds. It determines which fund managers require authorisation, sets asset thresholds that trigger full regulatory obligations, and establishes the framework for marketing alternative investment funds to EU investors. It also created a passport allowing AIFMs to market their funds throughout the EEA without relying on National Private Placement Rules (NPPRs). This note sets out the scope of AIFMD, the key thresholds and exemptions available, how the directive applies to EU and non-EU managers, as well as recent changes introduced by AIFMD II. The Alternative Investment Fund Managers Directive (Directive 2011/61/EU), commonly known as AIFMD, is the primary EU regulatory framework governing managers of alternative investment funds (AIFs). It was adopted in 2011 and transposed into national law across EU member states by July 2013. AIFMD was subsequently amended by Directive (EU) 2024/927 (AIFMD II), which had to be transposed by member states by 16 April 2026. AIFMD regulates alternative investment fund managers (AIFMs), not the funds themselves. Its core objectives are: Investor protection through enhanced transparency and disclosure requirements Systemic risk monitoring across the alternative investment fund sector A harmonised regulatory and supervisory framework for AIFMs operating across the EU An AIF is defined broadly as any collective investment undertaking that raises capital from a number of investors with a view to investing it in accordance with a defined investment policy for the benefit of those investors, and which is not a UCITS fund. This definition captures hedge funds, private equity funds, real estate funds, infrastructure funds, fund of funds and other non-UCITS structures. AIFMD applies to any entity that manages one or more AIFs, regardless of the legal form of those funds or whether they are open-ended or closed-ended. The directive captures both EU AIFMs and, in certain circumstances, non-EU AIFMs. Funds within scope Private equity and venture capital funds (including carried interest and co-investment vehicles) Hedge funds (including single-strategy and multi-strategy vehicles) Real estate, infrastructure and debt funds Fund of funds structures Any other collective investment scheme that does not require authorisation under the UCITS Directive Key regulated activities Portfolio management and risk management (these are the minimum functions that define an AIFM) Marketing of AIF units or shares to investors in the EU Administration, valuation and ancillary services (where performed by the AIFM) Delegation arrangements (the AIFM remains responsible even where functions are delegated to third parties) Structures outside scope Certain structures are expressly excluded from AIFMD, including holding companies, institutions for occupational retirement provision (IORPs), supranational institutions (such as the EIB and EBRD), central banks, national governments and bodies managing social security and pension funds, employee participation or savings schemes, securitisation special purpose entities, and single-investor vehicles where the investor itself has management control. AIFMD provides a registration regime for smaller EU-AIFMs that fall below certain asset thresholds. These sub-threshold AIFMs are exempt from the full scope of AIFMD but remain subject to registration and reporting obligations with their home member state regulator. De minimis thresholds (Article 3) EUR 100 million: applies where the AIFs managed include funds that employ leverage. This threshold is calculated on the total value of assets under management (AuM), including any assets acquired through leverage. EUR 500 million: applies where the AIFs managed are unleveraged and have no redemption rights exercisable during a period of five years from the date of initial investment. EU AIFMs that fall below these...