Mutual fund numbers on the rise

The Cayman Islands Monetary
Authority confirmed at the Cayman Fund Focus conference last week that mutual
funds registrations have continued to pick up during the third quarter of 2010.

Head of CIMA’s securities and
investment division Yolanda McCoy said she was pleased to announce that “the
numbers remain very impressive”.

As of 7 October there were 9,623
funds regulated by CIMA, consisting of 9,053 registered, 439 administered and
131 licensed funds. The total number of regulated funds increased by 137 or 1.4
per cent compared to the end of the second quarter 2010.

It is the second successive
increase in funds since mutual fund numbers dropped from their highest level of
10,291 in 2008 to 9,378 at the end of the first quarter 2010.

During the first eight months of
this year CIMA authorised on average 103 new funds, while approximately 45
funds were terminated, Ms McCoy said. This is a significant improvement over an
average of 98 authorisations and 63 terminations during the same period in

In the area of mutual fund
administration CIMA has noted a growing interest and is currently processing
three fund administrator license applications. The total number of fund
administrators increased by two to 133 over the second quarter. Of the 133
licensed fund administrators, 94 are part of the unrestricted or full category,
37 are restricted and two are exempted.

Optimism over new category

The Monetary Authority is
optimistic about the new fund administrator category that is scheduled to be
introduced toward the end of the first quarter in 2011. The new category is
aimed at attracting small to medium or niche service companies to the Islands.
It will allow service providers to apply for a license to offer partial fund
administration services, in particular registering and transfer agency

Ms McCoy also touched on recent
media coverage that seemed to suggest Cayman funds were leaving the islands to
take advantage of European UCITS structures.

“There has been much negative
publicity with regard to the development of UCITS and funds transferring from
Cayman to other jurisdictions such as Luxembourg, Malta and Ireland,” she said.

“From a regulatory point of view,
we do not have any supporting evidence of this trend.”

So far only four funds have
transferred from Cayman to Europe this year, she noted.

DMTC Managing Director Gary
Linford, who moderated the regulatory round-up session, added: “In Cayman we
get frustrated by what we read in the press about new funds moving to Ireland
and Luxembourg and a decline continually in the Financial Times about our
industry, and yet today you confirm that only four transfers have been made
this year.”

He asked Ms McCoy whether CIMA was
not able to publish statistics and a list of all new funds on a monthly basis.
Ms McCoy explained that CIMA publishes statistics on a quarterly basis due to
the back-dating of funds, which could lead to discrepancies in the number of
funds, if published weekly or monthly. 

However, this is about to change.
“With the new platform being brought online, we can now more effectively and
easily give industry as well as international stakeholders more accurate and
timely information,” Ms McCoy said.

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