Master fund registrations fall short of expectations

Following new legislation on the registration of hedge funds, 1,732 master funds had been registered with the Cayman Islands Monetary Authority by the end of the second quarter of 2012, falling short of the 3,000 to 4,000 expected by the government when announcing the plans in 2011.  

In December 2011, Cayman Islands Premier McKeeva Bush said the new registration fees for master funds would bring in $7 million to the public purse. Now it appears that this figure is closer to $4.33 million, based on the initial and annual CI$2,500 fee per master fund. 

Mr. Bush has already acknowledged the new regulatory system would also require additional resources for the monetary authority of about $750,000 a year. 

CIMA’s quarterly statistics show for the first time the true number of master funds after an initial registration deadline was extended from 21 March to 21 May. The government had to issue an advisory in February to clarify that master funds with only one CIMA-registered feeder fund and no other investors also fall under the registration requirement. Before the new law, master funds benefitted from an exemption from registration, if they had no more than 15 investors.  

The number of master funds that had to be registered under the amendments to the Cayman Islands Mutual Funds Law, which came into force on 22 December, 2011, pushes the total number of registered funds to 10,871, an all-time high. However, without the new registration requirement for master funds, fund numbers would have fallen by 17 to 9,139. 

Meanwhile, the number of class B banks increased by two during the second quarter of 2012 bringing the total number of banks to 235. The number of trust companies remained at 148. Registered controlled subsidiaries increased by two to 34 and private trust companies by five to 70. The number of corporate service providers also grew by one to 11 and company managers by two to 86. 

The number of active companies in Cayman has grown during the past 12 months by 3 per cent to 94,587. 

1,732 master funds have been registered with the Cayman Islands Monetary Authority. 

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