The deadline for updating the register of members for a Cayman Islands company is now approaching.
Following the approval of the Companies (Amendment) Law 2019 on 8 August 2019, the recast section 40 of the law requires that Cayman Islands Companies must now specify extra details regarding the rights accruing to each class of shares on their register of members.
For each class of share held by a Member, the register must now specify:
Existing Cayman Islands companies should undertake an examination of their existing share classes in order to ensure the register of members is updated to accurately reflect the new requirements.
Companies registered or incorporated on or before 8 August 2019 must comply with the new requirements by 7 February 2020.
Companies registered or incorporated after 8 August 2019 have until 7 November 2020 to ensure compliance.
The penalty for non-compliance will be CI$5,000, with every director who knowingly or wilfully permitted or authorised a default subject to a CI$5,000 individual penalty.
If you have any queries or would like more information, please contact your registered office, your usual MJH contact or firstname.lastname@example.org.
An upcoming decision of the Privy Council in the case of Pearson v Primeo1 is set to focus further attention on the pivotal concept of Net Asset Value (“NAV”) in open ended funds. The decision will be of interest to a wide range of market participants in the asset management industry.
The longstanding accepted position set out in Fairfield Sentry2 is that once calculated in accordance with the articles, the NAV was final and binding.
However, a recent Privy Council decision in Weavering3, shows that the position set out in Fairfield Sentry is subject to in extremis exceptions. NAV can be challenged where it has been misstated due to internal fraud. That means that in certain limited circumstances, if successful proceedings for rectification are brought in court, the NAV can be recalculated.
The distinction between the Fairfield Sentry and Weavering cases rests on the perpetrator of the fraud. In Weavering, the fraud was committed by a de jure director of the fund itself, whereas in Fairfield Sentry the fraud was committed by a third party external to the Fund (Madoff). Only internal, as opposed to external, fraud currently constitutes grounds for recalculation of the NAV.
The initial hearing of Pearson v Primeo took place on the 29th October in front of the Judicial Committee of the Privy Council and a judgement is expected shortly. Watch this space.
If you have any queries or would more information, please contact your usual MJ Hudson contact or email@example.com.
On 30 September 2019, the Data Protection Law, 2017 (“DPL”) – the Cayman Islands’ answer to the EU’s General Data Protection Regulation (the “GDPR”) – came into force.
The DPL is modelled on and has many similarities with the GDPR; it regulates the processing of personal data, transfers of personal data out of the Cayman Islands, and establishes the Cayman Islands Information Commissioner which has extensive investigatory and enforcement powers.
The DPL will apply if any personal data is processed in the Cayman Islands, regardless of whether the data controller is established there or not.
Transfers of personal data outside of the Cayman Islands must meet one of the grounds as set out in the DPL. The Cayman Islands will permit transfers of personal data to countries within the EEA and those deemed adequate by the EU Commission for data protection purposes. Nonetheless, the Cayman Islands’ application to the EU Commission for reciprocal treatment under the GDPR is yet to be made.
The DPL is a step towards seamless data flow between the EU and Cayman Islands. It will have important consequences for the processing and transfer of personal data between Cayman Islands investment funds, their service providers, investors and operators in light of the potentially significant penalties that may be imposed for non-compliance.
If you would like further advice, or need to review existing or proposed arrangements, please contact your usual MJ Hudson contact or firstname.lastname@example.org
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