Legislative amendments which aim to strengthen regulatory oversight and enhance investor protection in the Cayman Islands’ growing digital finance sector have been approved.
The Private Funds (Amendment) Bill, 2026, sponsored by the Ministry of Financial Services and Commerce, passed unanimously through parliament on 5 March.
It amends the Private Funds Act (2025 Revision) to provide for the framework and specific requirements for tokenised private funds.
Under the bill, a ‘tokenised private fund’ is defined as a private fund with any investment interests represented by digital investment tokens.
The bill amends definitions in the principal act and introduces new definitions relating to tokenised private funds.
One clause requires tokenised private funds to keep secure records of the issuance, transfer, sale and ownership of digital investment tokens.
It must make these records available to the Cayman Islands Monetary Authority (CIMA) when requested.
The bill also introduces new sections to the principal act, setting out specific requirements for tokenised private funds.
These include an annual confirmation to be made by the fund operator that all records of digital investment tokens have been properly maintained.
It also states that tokens can only be transferred with operator approval, and disclosure must be made of risks specific to the digital investment tokens in the offering document.
The bill also requires the offering document to explain how these risks are addressed or mitigated for investors.
The amendments mean that CIMA will gain supervisory powers over tokenised funds to ensure compliance and protect investors.
