Cayman welcomes ESMA announcement

At a session of the Economic and Monetary Affairs Committee at the European Parliament on 13 October 2015, Steven Maijoor, Chair of the European Securities and Markets Authority (ESMA), confirmed that ESMA will shortly commence an assessment of the Cayman Islands for its inclusion within the passport regime under the terms of the Alternative Investment Fund Managers Directive (AIFMD). Cayman Finance welcomes this move by ESMA, and is encouraged that ESMA’s assessment of the Cayman Islands – which in July ESMA noted is home to a significant proportion of non-EU investment funds being marketed within Europe – will commence shortly.

In his submission, Mr. Maijoor spoke about the functioning of the national private placement regimes (NPPRs) which are currently available to non-EU countries as well as ESMA’s recent advice on whether to extend to ‘third countries’ the AIFMD passport, which is currently only available to EU countries.

ESMA has taken a country-by-country approach to its assessment of third countries rather than assessing them as a single block, and it is apparent that ESMA plans to conduct all assessments on the basis of the comprehensive assessment methodology by which it evaluated the first six countries to be assessed. The first set of assessments resulted in positive advice being given in respect of extending the passport to Guernsey and Jersey, conditional advice in respect of Switzerland (subject to the enactment of pending legislation in Switzerland) and a deferral of conclusion in respect of Hong Kong, Singapore and the United States.

Mr Maijoor highlighted that ESMA is focusing its efforts on three key areas in the short term. These are: to proceed with their assessment of Hong Kong, Singapore and the United States with the objective of definitively concluding on whether to extend the passport to these countries; start to assess a second group of six non-EU countries, including the Cayman Islands; and lastly to put in place the extensive framework to govern the AIFMD passport regime in the event that the AIFMD passport is successfully extended to non-EU countries.

Welcoming recent developments, Jude Scott, CEO of Cayman Finance, stated that “Cayman Finance is committed to supporting the investment funds industry, the Cayman Islands Government and the Cayman Islands Monetary Authority in the course of ESMA’s assessment process. With the implementation of new opt-in AIFMD regulatory regimes for investment fund managers and investment funds – both of which are compliant with the requirements of AIFMD – we are optimistic

of a positive advice being given by ESMA in respect of the Cayman Islands prior to the AIFMD passport framework being put in place and therefore the continuing prominence of the Cayman Islands within the European funds industry”.