The Cayman Islands Government gazetted the Mutual Funds (Amendment) Act, 2026 (Act 5 of 2026) and the Private Funds (Amendment) Act, 2026 (Act 6 of 2026). Both Acts commenced on 24 March 2026. They amend the Mutual Funds Act (2025 Revision) and the Private Funds Act (2025 Revision).
The Acts introduce defined terms: digital equity token, digital investment token, tokenised mutual fund, and tokenised private fund. They impose registration and ongoing supervisory duties on tokenised funds equivalent to those on traditional funds. The Cayman Islands Monetary Authority (CIMA) holds supervisory authority. CIMA may request information needed to assess tokenised-fund applications and conduct inspections of the underlying technology and digital token transactions.
Cayman-domiciled tokenised feeder funds, tokenised master funds, and tokenised closed-ended private funds operate under the same audit and custodian duties as their traditional counterparts. Investment managers, administrators, and auditors continue in established roles. No separate independent audit or custodian obligation applies to digital token structures beyond existing fund rules.
Tokenisation does not change a fund's classification. CIMA inspections may cover smart contract code, transfer agent integration, and on-chain transaction records. Existing Cayman funds adopting tokenisation must update offering documents and notify CIMA. Anti-money laundering and Beneficial Ownership Transparency Act duties continue without modification.
Licentium advises crypto and digital asset clients on Cayman fund formation and works with Cayman counsel on filings and CIMA correspondence. Contact us if your fund tokenises share classes or operates on a blockchain. Work we undertake includes Cayman tokenised fund applications, offering document review, smart contract due diligence, on-chain compliance reviews, and CIMA inspection readiness.
Source: Cayman Islands Government, Mutual Funds (Amendment) Act, 2026 (Act 5 of 2026) and Private Funds (Amendment) Act, 2026 (Act 6 of 2026), in force 24 March 2026, https://gov.ky/w/government-streamlines-tokenised-funds-legislation, confirmed 14 May 2026.
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