The Retail Mutual Funds (Japan) Regulations, 2003

The Retail Mutual Funds (Japan) Regulations 2003 (the "Regulations") were introduced by the Cayman Islands' Government on November 19, 2003. They apply to Cayman Islands mutual funds marketed to the Japanese public (for the purposes of this update termed "retail mutual funds").

The Regulations address specific concerns expressed by some Japanese distributors and regulatory bodies. Although some retail mutual funds have been launched, it is expected that the Regulations will create a greater degree of certainty resulting in significant growth in the mutual funds sector.

The Regulations are aimed at complying with the requirements of the Japan Securities Dealers Association ("JSDA") (which apply to publicly offered offshore funds), the provisions of the Business Practice Rule, Number 4, Articles 26-27, the Japanese Income Tax Law and the Securities Exchange Law.