With effect from 1st January 2016, Reporting Financial Institutions including investment funds are required to have new account opening procedures in place in order to meet the requirements of the Regulations issued by the Cayman Islands Tax Information Authority which form part of the Common Reporting Standard (“CRS”) regime.
In October 2015, following an announcement earlier in the year by the Cayman Islands government that it would implement the OECD Common Reporting Standard, regulations were issued setting out the due diligence and reporting requirements which apply to Reporting Financial Institutions (“RFI”) in the Cayman Islands. The classifications and definition of RFI are similar to those under FATCA.
Under the regulations, investment funds should have updated their subscription documents and investor on-boarding procedures to ensure that the necessary tax identification and tax residency information is obtained from new subscribers to the fund.
In addition, with effect from 1st January 2016 all pre-existing investor accounts – i.e. those existing as at 31 December 2015 – are subject to additional due diligence procedures in order to ensure that the funds or their administrators have identified reportable accounts and hold the information necessary to make the required filings to the Cayman Islands Tax Information Authority in 2017.