Today, the Cayman Islands Government released an important industry advisory on The Responsible Officer Role in the Cayman Islands that finally addressed the growing misperception that the Cayman Islands implementing legislation, expected later this year, would address or impact the role of the FATCA Responsible Officer required under the U.S. Treasury regulations. The Cayman Islands Government has now confirmed this not to be the case.
As expressed in our 7 Deadly Myths of FATCA, the FATCA Responsible Officer role is – and always will be – a requirement of the IRS and is not subject to any changes from Cayman Islands legislation.
This government advisory is welcome news to those fund sponsors that were adopting a “wait and see” approach and relying on the release of Cayman Islands legislation before finalizing their FATCA preparations. The advisory provides clarity and removes any doubt. Fund sponsors should now consult with their counterparties and seek advice from counsel qualified in U.S. tax law to finalize their FATCA preparations.
The Cayman Islands has historically never required local directors or officers of Cayman Islands investment funds. This advisory confirms that any director or officer of a Cayman Islands investment fund, based anywhere in the world, can serve as its FATCA Responsible Officer to comply with FATCA.