January 9, 2020
On June 18, 2019, the Securities Investment Business (Amendment) Law, 2019 (the “Amendment Law”) entered into force in the Cayman Islands, significantly amending the Securities Investment Business Law (2019 Revision) (“SIBL”), including by requiring non-U.S. sponsors with Cayman Islands fund managers or investment advisers to re-register such entities with the Cayman Islands Monetary Authority (“CIMA”). Further, non-U.S. sponsors that have made Form ADV filings with the U.S. Securities and Exchange Commission (the “SEC”) should promptly consider whether to update the disclosures in their Form ADV filings. To elaborate:
 It is worth noting that only Cayman Islands “fund managers” are required in addition to comply with the Cayman Islands International Tax Co-operation (Economic Substance) Law, 2018 (the “Economic Substance Law”). “Fund managers” are persons “managing securities belonging to another person in circumstances involving the exercise of discretion” within the meaning of Schedule 2 of SIBL, as amended by the Amendment Law, that are within SIBL’s ambit. A discussion of the implications of the Economic Substance Law on fund managers falls outside of the scope of this briefing.
 The most common of the six exemptions from having to obtain a full license under SIBL (which are set out in Schedule 4 of SIBL) is for persons that carry on “securities investment business” for (a) a “sophisticated person” (as defined in SIBL), (b) a “high net worth person” (as defined in SIBL) or (c) a company, partnership or trust (whether or not regulated in the Cayman Islands as a mutual fund) of which the shareholders, unit holders or limited partners are one or more persons falling within (a) or (b).
 Under the Amended SIBL, Registered Persons will be subject to additional supervision and inspection by CIMA that previously applied only to those entities that were fully licensed under SIBL (“Licensees”) but not to Excluded Persons under SIBL (e.g., obtaining CIMA approval before commencing securities investment business). However, Registered Persons will not be subject to the full scope of CIMA supervision and oversight as Licensees and will not be required to comply with certain regulations under the Amended SIBL.
 The registration process for Registered Persons is currently taking about 10 weeks (and may take longer if the documents submitted as part of the registration application are defective or if CIMA chooses to ask questions). Applicants must allow sufficient time for this registration process when considering when to hold the first closing of the related fund (assuming the applicant is required to provide services to the fund immediately following the first closing).
The following Gibson Dunn lawyers assisted in preparing this client update: John Fadely and Albert Cho.
Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Investment Funds practice group:
Chézard F. Ameer – Dubai and London (+971 (0)4 318 4614, firstname.lastname@example.org)
Albert S. Cho – Hong Kong (+852 2214 3811, email@example.com)
John Fadely – Hong Kong (+852 2214 3810, firstname.lastname@example.org)
Jennifer Bellah Maguire – Los Angeles (+1 213-229-7986, email@example.com)
Y. Shukie Grossman – New York (+1 212-351-2369, firstname.lastname@example.org)
Edward D. Sopher – New York (+1 212-351-3918, email@example.com)
C. William Thomas, Jr. – Washington, D.C. (+1 202-887-3735, firstname.lastname@example.org)
Gregory Merz – Washington, D.C. (+1 202-887-3637, email@example.com)
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