EMIR - Impact For Cayman Funds

Take Care – EMIR Impacts Cayman Funds

As managers of Cayman Funds are coming to grips with the reporting requirements of AIFMD¹, a second wave of European legislation, namely EMIR², approaches the Cayman Islands. EMIR will have to be navigated by Cayman Funds trading derivatives both with European Union counterparties, and in certain circumstances, even when trading with non-European Union counterparties.

Although the provisions of EMIR principally impact European entities which are financial counterparties³ ("FC's") and non-financial counterparties⁴ ("NFC's") as defined in EMIR, managers of Cayman funds will need to be aware of EMIR and how it might impact their funds when trading with European counterparties. In addition, provisions of EMIR relating to Extraterritoriality and Equivalence will impact third country entities, including Cayman Funds, in certain circumstances, even when they are trading with non-European entities.