A major hedge fund body has supported Cayman Islands in its bid to gain the European marketing passport for offshore hedge funds, which European regulators have already approved for Guernsey, Jersey and Switzerland.
The Alternative Investment Management Association (Aima) says Cayman, a major offshore centre for hedge funds, is well-placed to get a successful review and be granted the passport by the European Securities and Markets Authority (Esma).
Esma did not include Cayman in its first review of whether to grant the passport to non-EU domiciles under the Alternative Investment Fund Managers Directive (AIFMD).
Alan Milgate, chairman of Aima Cayman, says: “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.”
Aima says Cayman has already entered into the requisite co-operation arrangements with the major EU investment securities regulators and enacted the necessary tax information exchange agreements with EU governments as required by the AIFMD.
The Cayman Islands government has been developing an AIFMD compliant opt-in regime so that alternative funds based their could meet the EU standards for offshore funds.
AIMA says it is in the interests of institutional investors in Europe and hedge fund managers globally that Cayman be granted the passport.
Jack Inglis, chief executive of Aima, says: “The global industry as a whole needs Cayman AIFs [alternative investment funds] 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.”
He says the new Cayman regime “looks similar to those in the jurisdictions that have already obtained favourable assessments”.
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