In April 2023, the Cayman Islands Monetary Authority ("CIMA") issued a new Statement of Guidance on Corporate Governance for Mutual Funds and Private Funds ("SOG") and Rule on Corporate Governance for Regulated Entities ("Rule"). The Rule and SOG will replace the existing corporate governance regulatory measures.


CIMA reviewed the corporate governance supervisory and regulatory framework to identify and implement areas for enhancement based on the following:

  • Lack of supervisory enforceability of corporate governance statements of guidance.
  • Inconsistent application of binding corporate governance rules across regulated sectors.
  • Scope of applicability of the current corporate governance measures not extending to all regulated entities.
  • Alignment with international corporate governance principles and standards.

New Rule

Following such review, CIMA issued a new Rule on Corporate Governance for Regulated Entities which will be applicable to all entities regulated by CIMA and an industry-specific SOG on Corporate Governance for Mutual Funds and Private Funds.


The substantive changes between the prior Statement of Guidance on Corporate Governance for Regulated Mutual Funds and the new SOG are as follows (many of which will have already been considered by operators of regulated funds):

  • Extending the SOG to private funds regulated under the Private Funds Act (as amended).
  • That the Operators1 of a regulated fund should constitute an appropriate number of individual(s) with a diversity of skills, background, experience and expertise to ensure that there is an adequate level of competence at the Operators' level.

Conflicts of Interest

  • That Operators of a regulated fund should have a written conflicts of interest policy in place, commensurate with the size, complexity, structure, nature of business and risk profile of the operations of the business of the regulated fund, which may be documented in the constitutional documents, offering documents or marketing materials, as applicable, of the regulated fund.
  • That disclosures of conflicts of interest must be documented in a manner consistent with the regulated fund's constitutional documents, offering documents or marketing materials, as applicable.

Duties of Operators

  • CIMA recognizes that the Operators may consist of members from the parent company, group or business associates of the regulated fund, or any person providing, directly or indirectly, the investment management or investment advisory services with respect to such mutual fund or private fund, but expects all members to exercise independent judgment and objectivity in the decision making of the Operators.
  • That any concerns raised with respect to the regulated fund and related corrective action are documented.
  • That Operators should communicate material changes, and evidence such communication, relating to investor rights to investors of the regulated fund at the time the changes are being made or on an ongoing basis.

Concluding Remarks

The new SOG affects all regulated funds and sets a benchmark for such funds generally. The Operator of a regulated fund should take this opportunity to review the fund's corporate governance arrangements and practices, in light of the new SOG.

Campbells can assist in ensuring all regulated funds are conducting their affairs in accordance with all Cayman Islands laws, acts, regulations and regulatory measures.


1. Pursuant to the SOG the Operator is considered to be the Governing Body of a Mutual Fund or Private Fund, i.e. the Board of Directors (in the case of a company), the General Partner (in the case of a partnership), the manager (in the case of a limited liability company) or the board of trustees (in the case of a trust business).

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