Effective from 24 March 2026, these changes provide regulatory certainty for fund professionals and investors by confirming how tokenised investment fund structures should be considered. Previously, the lack of explicit statutory provisions created ambiguity, particularly regarding the applicability of the Virtual Asset (Service Providers) Act (VASP Act), to digital tokens representing ownership interests in funds.

The Mutual Funds (Amendment) Act, 2026 introduces specific provisions to ensure that tokenised mutual funds are subject to the same regulatory oversight as traditional mutual funds. This amendment reduces the risk of a more onerous compliance burden by aligning tokenised fund structures with established compliance and reporting standards.

The Private Funds (Amendment) Act, 2026 extends regulatory requirements to tokenised private funds, ensuring that these innovative structures adhere to the same governance, operational, and transparency principles as conventional private funds. This amendment aims to safeguard investor interests while supporting the growth of tokenised fund offerings by providing certainty as to the compliance and regulatory requirements.

The Virtual Asset (Service Providers) (Amendment) Act, 2026 clarifies the scope of the Virtual Asset (Service Providers) Act, explicitly confirming that the issuance of digital tokens representing ownership interests in funds is not considered to be an “issuance of virtual assets” or “virtual asset issuance”. This amendment resolves prior uncertainties and aligns the Cayman Islands’ regulatory framework with international standards for virtual assets.

Together, these legislative updates aim to foster innovation while maintaining robust regulatory oversight.

For more information the Industry Advisory can be found here