CIMA publishes new tokenised fund policy
15 October 2026 Cayman Islands
Image: Garun_Studios/stock.adobe.com
The Cayman Islands Monetary Authority (CIMA) has published a new policy for the approval of tokenised funds, outlining the criteria by which registration and licensing applications will be assessed.
The policy is applicable to those seeking registration under the Mutual Funds Act (MFA) or the Private Funds Act (PFA) with the intention of operating as a tokenised fund, entities already regulated that are transitioning to a tokenised model, and any other structure that CIMA determines to constitute a tokenised fund.
To apply for approval as a tokenised fund, CIMA says applicants must submit a completed questionnaire through the Regulatory Enhanced Electronic Forms Submission (REEFS) platform.
Upon receipt, the authority will take into consideration the offering document and any other applicable documentation, the applicability of the Virtual Asset Service Providers Act (VASPA), and regulatory considerations of the proposed structure, conditions, and other supervisory matters deemed relevant.
CIMA can impose conditions on the tokenised fund it considers appropriate concerning the nature, scale, and complexity of a given proposal.
When assessing an application, the authority will determine whether arrangements comply with applicable regulations: MFA, PFA, VASPA, and the Anti-Money Laundering Regulations, among others.
If conditional approval is granted by CIMA, applicants must provide written confirmation of their concurrence within five business days, and failure to do so may result in the authority returning the application.
As part of the assessment criteria, tokenised funds must adequately protect the interests of investors; have the appropriate governance, operational, and risk management frameworks; maintain the integrity of the fund’s register and investor records; provide appropriate investment disclosures related to tokenisation; and not bring about material regulatory, operational, or investor protection risks.
The regulatory body expects tokenised funds to complete and maintain accurate records of issuance, transfers, and redemptions, which must be securely maintained and capable of independent audit through the underlying blockchain or distributed ledger.
Funds must also notify CIMA if issued tokens become impaired due to failures or disruptions affecting the supporting blockchain infrastructure, redemption of tokens is unavailable within a “reasonable period”, or any other event that “may materially affect the operation of the tokenised fund” occurs.
The new policy is effective upon gazettement — publication in the Cayman Islands Gazette.
The policy is applicable to those seeking registration under the Mutual Funds Act (MFA) or the Private Funds Act (PFA) with the intention of operating as a tokenised fund, entities already regulated that are transitioning to a tokenised model, and any other structure that CIMA determines to constitute a tokenised fund.
To apply for approval as a tokenised fund, CIMA says applicants must submit a completed questionnaire through the Regulatory Enhanced Electronic Forms Submission (REEFS) platform.
Upon receipt, the authority will take into consideration the offering document and any other applicable documentation, the applicability of the Virtual Asset Service Providers Act (VASPA), and regulatory considerations of the proposed structure, conditions, and other supervisory matters deemed relevant.
CIMA can impose conditions on the tokenised fund it considers appropriate concerning the nature, scale, and complexity of a given proposal.
When assessing an application, the authority will determine whether arrangements comply with applicable regulations: MFA, PFA, VASPA, and the Anti-Money Laundering Regulations, among others.
If conditional approval is granted by CIMA, applicants must provide written confirmation of their concurrence within five business days, and failure to do so may result in the authority returning the application.
As part of the assessment criteria, tokenised funds must adequately protect the interests of investors; have the appropriate governance, operational, and risk management frameworks; maintain the integrity of the fund’s register and investor records; provide appropriate investment disclosures related to tokenisation; and not bring about material regulatory, operational, or investor protection risks.
The regulatory body expects tokenised funds to complete and maintain accurate records of issuance, transfers, and redemptions, which must be securely maintained and capable of independent audit through the underlying blockchain or distributed ledger.
Funds must also notify CIMA if issued tokens become impaired due to failures or disruptions affecting the supporting blockchain infrastructure, redemption of tokens is unavailable within a “reasonable period”, or any other event that “may materially affect the operation of the tokenised fund” occurs.
The new policy is effective upon gazettement — publication in the Cayman Islands Gazette.
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