Observations and Changes for REEFS Investment Strategy Selections

To enhance monitoring and improve the reporting accuracy of the regulated Mutual Funds’ and Private Funds’ (the “Funds”) investment strategies, the Cayman Islands Monetary Authority (the “Authority”) advises that certain changes will be officially made, effective 15 November 2023, to the Investment Strategy selections available in the REEFS portal for fund applications and FAR filings.

As the Authority aims for more improved statistical reporting in relation to the underlying investment strategies of the Funds, certain general Investment Strategy categories will be officially removed, and more granular classifications will be added. The naming of some Investment Strategy categories has also been revised for clarity.

Against the backdrop of various global initiatives within the Environmental, Social, and Governance ("ESG") landscape, and the Cayman Islands Government’s Climate Change-related initiatives, the Authority recognises that more robust approaches for identifying, measuring, monitoring, and managing material ESG-related risks are paramount. Therefore, in the first instance, it is imperative that the Authority obtain more accurate data on the number of ESG, and/or climate-focused funds in the jurisdiction. The Authority has, however, observed that ESG is seldom selected in fund applications or FAR submissions, despite considerable evidence in the Offering Memorandums that the funds incorporate ESG considerations.  The Authority hereby requests that funds where ESG is their core focus should have that selected as the Primary Investment Strategy. For funds that have ESG considerations as non-core, but with material substance, ESG should be selected as the Secondary Investment Strategy.

The changes are as follows:

Removed from the Investments Strategy list

• Private Equity
• Other

Added to the Investments Strategy list

• Absolute Return
• Capital Structure Arbitrage
• Convexity
• Derivatives Trading
• Energy/Power
• Equity Hedged
• Equity Long Only
• Fund of Private Equity Funds
• Growth Equity/Growth Capital
• Infrastructure
• Leveraged Buyout (LBO)
• Long-Only Absolute Return
• Private Credit
• Quantitative
• Secondaries

Amendments to the Investments Strategy list

• Asset-Backed/Mortgage-Backed Securities
• Crypto/Digital/Virtual Assets-related
• Distressed/Special Situations
• Fixed Income/Debt
• Fixed Income Arbitrage/Debt
• Foreign Exchange/Currency Trading

Note:

Fund registrations:

• The revised Investments Strategy list has been available in the REEFS Portal using the drop-down menu for manual submission of fund registration applications since early 2023. Only these selections can be selected when doing a manual submission.
• On or after 15 November 2023, all fund registration applications (including bot submissions) must use the revised Investment Strategies list.

FAR submissions:

• FAR for funds pertaining to the financial years ending 31 December 2023 or thereafter must use the revised Investment Strategy list in FAR submissions.