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Cayman Islands Chapter: American Bar Association’s Global Financial Collateral

November 2021 Barnabas Finnigan

Cayman Islands law does not lay out a specific regime for taking security interests in securities, securities accounts, or deposit accounts and does not recognize a concept of “perfection” of security interests per se.

In financing transactions involving debt securities that are governed by Cayman Islands law or equity securities issued by a Cayman Islands entity (whether an exempted company, a limited liability company, or an exempted limited partnership), the parties will often choose Cayman Islands law to govern the relevant security agreement. That is not mandatory, and in some transactions the parties may choose another law to govern the transaction documents (for example, in the case of collateralized loan obligations (CLO) and other securitization structures the indenture is typically governed by New York law).

 

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