Cayman Funds: Beneficial Ownership Contact Person

A beneficial ownership contact person is the individual a Cayman registered fund names, instead of maintaining a full beneficial ownership register, when it uses the alternative route to compliance under the Beneficial Ownership Transparency Act. The contact person must sit at a licensed fund administrator or another Cayman person licensed or registered under a regulatory law, and must be able to provide beneficial ownership information to the Registrar on request.

Key takeaways

• All partnerships, including exempted limited partnerships and limited partnerships, are within scope of the Beneficial Ownership Transparency Act.
• The former exemption for funds registered under the Mutual Funds Act or the Private Funds Act has effectively been removed.
• Registered funds can instead use an alternative route to compliance by naming a contact person.
• The contact person may be required to provide requested beneficial ownership information within 24 hours of a request.
• Breaches of the Act or the Regulations can lead to administrative fines.

What the Beneficial Ownership Transparency Act changed for funds

The Beneficial Ownership Transparency Act (As Revised), together with the Beneficial Ownership Transparency Regulations, sets the beneficial ownership regime for Cayman Islands legal persons. Administrative fines may be imposed, subject to procedural requirements, for a breach of the Act or the Regulations, so every in-scope fund vehicle needs to have its compliance arrangements in place.

The key changes for Cayman Islands investment fund vehicles are:

• all partnerships, including exempted limited partnerships and limited partnerships, are within the scope of the Act; and
• exemptions available under the previous beneficial ownership regime have effectively been removed, including the exemption for funds registered under the Mutual Funds Act or the Private Funds Act. Registered funds can instead use an alternative route to compliance.

For funds structured as partnerships, our guide to setting up a Cayman venture capital fund explains how the general partner and exempted limited partnership fit together.

The alternative route to compliance

Under the alternative route to compliance, a Cayman Islands investment fund vehicle provides the corporate services provider that maintains its beneficial ownership register in the Cayman Islands, typically its registered office, with details of a contact person at either:

1. a licensed fund administrator; or
2. another person in the Cayman Islands that is licensed or registered under a regulatory law for providing beneficial ownership information.

The contact person may be required to provide the Registrar of Companies or the Registrar of Partnerships, as appropriate, with requested beneficial ownership information within 24 hours of the request being made.

Who can act as contact person

Bell Rock Group, as a company manager licensed by CIMA under the Companies Management Act (As Revised), falls within the second category. Subject to agreement, Bell Rock can act as contact person for registered funds taking the alternative route to compliance, and has established policies and procedures designed to help funds respond to Registrar requests for beneficial ownership information. The information itself comes from the fund's investor records, which are typically held by its administrator, so the arrangement depends on that information being available promptly.

What registered funds need to decide

Investment funds registered with the Cayman Islands Monetary Authority need to decide whether they will take the alternative route to compliance or establish and maintain a beneficial ownership register.

A registered fund that intends to take the alternative route should check that its corporate services provider can act as contact person, or that another eligible person has agreed to do so. The choice sits alongside the fund's other investor reporting obligations, including Cayman FATCA classification and reporting, and its AML obligations, which draw on the same investor information.

Frequently asked questions

Do Cayman funds still have a beneficial ownership exemption?

No. The exemption for funds registered under the Mutual Funds Act or the Private Funds Act has effectively been removed. Registered funds can instead use the alternative route to compliance.

Are exempted limited partnerships in scope?

Yes. All partnerships, including exempted limited partnerships and limited partnerships, are within the scope of the Beneficial Ownership Transparency Act.

How quickly must a contact person respond?

The contact person may be required to provide requested beneficial ownership information to the relevant Registrar within 24 hours of the request.

Related reading

• Cayman registered office requirements
• Cayman company statutory filings and records
• Cayman private funds regime
• Cayman Beneficial Ownership Requirements: What Entities Must Do

Bell Rock maintains beneficial ownership records and contact person arrangements through its Cayman corporate administration services.