Cayman Islands Moves To Tighten Hedge Fund Corporate Governance

In a move that will be of interest to hedge fund investors, as well as hedge funds registered in the offshore domicile, the Cayman Islands Monetary Authority (CIMA) recently began a formal consultation to bolster corporate governance guidelines. By consulting with local industry associations and other interested stakeholders on proposals, the Caymans seek to align themselves with a growing international movement toward enhanced governance and transparency in the financial services industry.

The proposals include a recommendation to amend the Companies Management Law to enable the regulation and supervision of individuals offering themselves or acting as directors of six or more Cayman Islands-registered entities. In addition to conducting an industry survey on corporate governance review, CIMA noted that it continues to review a few aspects of regulations that are linked to corporate governance, including the provision of corporate directors to Cayman Islands-regulated entities.

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