CIMA Rule on Corporate Governance - Cayman Funds

The Corporate Governance Rule and the Internal Controls Rule and SOG apply to all CIMA regulated entities (including private funds regulated under Cayman's Private Funds Act and mutual funds regulated under Cayman's Mutual Funds Act (together, Regulated Funds)). The Corporate Governance Rule and the Internal Controls Rule and SOG came into effect on 14 October 2023.

he Corporate Governance Rule (which, importantly, Regulated Funds should read in conjunction with the Corporate Governance SOG, which requires all regulated entities, including Regulated Funds such as CV5 and CV5 Digital, to establish, implement and maintain a corporate governance framework that is commensurate with the size, complexity, structure, nature of business and risk profile of their operations and which addresses, at a minimum:

1. Objectives and strategies of the Regulated Fund

2. Structure and governance of the Governing Body

3. Appropriate allocation of oversight and management responsibilities

4. Independence and objectivity

5. Collective duties of the Governing Body

6. Duties of individual directors of the Governing Body

7. Appointments and delegation of functions and responsibilities

8. Risk management and internal control systems

9. Conflicts of interest and code of conduct

10. Remuneration policy and practices

11. Reliable and transparent financial reporting

12. Transparency of communications

13. Duties of senior management

14. Relations with CIMA

The Corporate Governance Rule also requires all conflicts of interest to be disclosed to the Governing Body on at least an annual basis, via a written annual declaration (and for any changes to such declaration to be communicated throughout the year). The Governing Body of a Regulated Fund should ensure that these, and all other applicable governance matters, are added to their standard agenda for consideration by the Governing Body on at least an annual basis.

Unlike the Corporate Governance SOG (which contains recommendations as to how Regulated Funds should operate and represents a measure against which CIMA will assess their regulatory compliance), the Corporate Governance Rule creates binding obligations on all CIMA regulated entities in respect of which a breach may lead to the imposition of a fine or a regulatory action being taken against a regulated entity (and/or its Operators, where applicable) by CIMA pursuant to the exercise of its powers under the relevant regulatory acts.

CV5 and CV5 Digital

Both regulated platforms are subject to the ever increasing powers of CIMA under the various guidance notes and rules applicable. This has led to a shift by fund managers to platforms such as CV5 and CV5 Digital who provide ongoing operational, regulatory, governance and compliance support on the ground in the Cayman Islands enabling fund managers to focus on making investment decisions, building an audited track record and raising capital within a framework that meets institutional due diligence requirements. For more information on launching a hedge fund, feel free to contact us: info@cv5capital.io