New CIMA Rule and Statement of Guidance for corporate governance – Mutual Funds and Private Funds
On 14 April 2023, CIMA published a new Rule (“Rule”) and Statement of Guidance for (”SOG”) corporate governance for Mutual Funds and Private Funds.
The Rule becomes effective in October 2023 and sets out CIMA’s requirements for corporate governance for all entities regulated by CIMA inclusive of Mutual Funds and Private Funds.
The SOG became effective on 14 April 2023 and sets out CIMA’s guidance for corporate governance for Mutual Funds and Private Funds. The SOG sets out CIMA’s minimum expectations for corporate governance for fund operators to implement into the operations of their funds. Notably, this SOG replaces the previous Statement of Guidance – Corporate Governance for Regulated Mutual Funds issued by CIMA in 2013 and brings Private Funds into scope.
CIMA considers fund operators the governing body (board of directors for incorporated entities and the general partner of a partnership).
Key changes include:
- Private Funds are now in the scope of the SOG;
- CIMA’s wider expectations for board meetings of Private Funds and records of those meetings;
- CIMA’s clarification of board composition to include diversity of background, skills, experience and expertise as well as an appropriate number of directors;
- CIMA’s increased obligations for self-assessment of the performance of operators;
- CIMA’s increased focus on the independence of operators, adherence to a code of conduct and application of independent judgement;
- CIMA’s increased expectations on management and disclosure of conflicts of interest of operators; and
- Penalties for non-compliance with the Rule can be levied by CIMA against the fund and its operators.
Reach out to Stefanie Suckoo, at BGA Law (Cayman) Limited, using the details below to discuss how these changes may affect your Cayman-regulated fund.
Stefanie.Suckoo@bga.law | (345) 769-1618
For further reading on the new rules, please download the document from CIMA by entering your details below: