Ogier confident that Cayman will be granted funds “passport” by ESMA
The decision by the European Securities and Markets Authority (ESMA) to hold off ruling on a ‘passport’ to market alternative investments into the EU until ongoing legal reforms have been concluded has been welcomed by Ogier’s Head of Global Investment Funds, Giorgio Subiotto.
ESMA has backed Cayman on the key criteria of competition and market disruption, but say that a final decision cannot be made on the granting of a “passport” until ongoing work on the AIFMD-equivalent regime and legislative amendments over enforcement powers come into force, which the Cayman Islands Government have stated they expect to achieve shortly having worked closely with ESMA on this.
Noting the comments of Cayman Finance that they expect the status quo to continue via the existing national private placement regime (NPPR), Giorgio said: “Based on the detailed report released by the regulator, we fully expect the passport application to be granted in due course.
“In the meantime, the position remains unchanged and the existing NPPR route remains in place, so we do not expect any disruption to the sector.
“Cayman is home to more than 11,000 regulated investment funds and at Ogier we have the third largest dedicated team of investment funds lawyers in the jurisdiction – we have no doubt that the commitment of the Cayman Government, the Cayman Islands Monetary Authority and the rest of the industry to a world-leading regulatory regime means that there will be no barriers to the granting of the passport.”
EU legislation requires ESMA to declare whether non-EU countries marketing hedge funds, private equity and other alternative investments into the EU are regulated to an equivalent standard to the EU.
The “passport” system will allow non-EU countries assessed as equivalent to offer services to investors across the EU, rather than applying for permission on a country by country basis.