The Cayman Islands is confident that the pan-European marketing ‘passport’ will be extended to alternative investment funds (AIFs) set up in the jurisdiction, according to the Alternative Investment Management Association (AIMA), the global hedge fund industry association.
Cayman, where a high percentage of offshore hedge funds are registered, still awaits assessment by the European Securities and Markets Authority (ESMA). It was not included in the initial assessments which saw ESMA recommend the passport for Jersey, Guernsey and Switzerland under the Alternative Investment Fund Managers Directive (AIFMD).
But AIMA said that Cayman was well-placed to have a successful review in the near future.
Cayman has already entered into the requisite co-operation arrangements with the major EU investment securities regulators and the necessary tax information exchange agreements with EU governments as required by the AIFMD, AIMA said. In addition, the Cayman Islands Government has been developing an AIFMD compliant opt-in regime to ensure that the jurisdiction can continue to meet the needs of Cayman-based alternative investment fund managers who want to market funds into the EU under the passport.
AIMA said it was in the interests of institutional investors in Europe and hedge fund managers globally that Cayman be granted the passport.
Jack Inglis, CEO of AIMA, said: “The global industry as a whole needs Cayman AIFs to be approved under the AIFMD passport to ensure that pension funds and other European institutional investors can continue to benefit from investing in some of the world’s leading alternative investment funds. We are confident that Cayman will be granted the passport since the new Cayman regime looks similar to those in the jurisdictions that have already obtained favourable assessments.”
Alan Milgate, Chairman of AIMA Cayman, said: “ESMA’s decision should not be misinterpreted. Cayman has simply not yet been assessed, and has certainly not been adversely opined on, or excluded by ESMA. We look forward to the Cayman Islands being assessed positively in ESMA’s ongoing review of additional non-EU jurisdictions and that AIFMs based in the Cayman Islands will continue to benefit from evolving legislation which is both flexible and adaptable.”