Cayman Islands Introduces New Tokenised Fund Regimes

The Cayman Islands has taken a significant step in accommodating fund tokenisation within its established regulatory framework. Through the enactment of three complementary pieces of legislation, the Cayman Islands has enabled fund operators to issue tokenised fund interests within the familiar mutual fund and private fund architecture, whilst preserving the regulatory safeguards around disclosure, record-keeping, transfer approval and CIMA supervision that investors and managers expect.

For fund operators, the two fund-specific regimes are substantially aligned in their core obligations. The material differences lie in the terminology used for the tokenised interests, the regulatory gateway through which the record-keeping requirements are tested and the role (or absence) of a licensed mutual fund administrator. The concurrent amendment to the virtual asset services legislation provides certainty that the issue of tokenised fund interests does not attract regulation under the