Article by Ingrid Pierce, Denise Wong, Hughie Wong, Tim Ludford-Thomas and Laura Rogers From Walkers

Last Updated: 14 September 2015

The Cayman Islands Monetary Authority (“CIMA”) issued a new Rule and Regulatory Procedure earlier this year relating to the cancellation of licences and certificates of registration issued to Cayman Islands regulated mutual funds.

This client advisory is intended to provide a reminder to Cayman Islands regulated mutual funds that have ceased to carry on business, or intend to cease to carry on business, and would like to apply for an audit waiver from CIMA, to apply for deregistration prior to 1 October 2015.

The Regulatory Procedure states that unless a regulated mutual fund qualifies for an audit waiver, it must provide audited accounts from the date of the last financial year end (for which audited statements have been filed) either to the date of commencement of winding up where third party liquidators have been appointed or the date of the final distribution (if no third party liquidators have been appointed) (referred to as the “stub period”).

Under CIMA’s Regulatory Policy on Exemption from Audit Requirements for a Regulated Mutual Fund CIMA may, in its discretion, decide to exempt a Cayman Islands regulated mutual fund from audit in certain limited circumstances, including (i) where a fund has not launched but does not wish to be deregistered; (ii) where a fund has not launched and is being liquidated or wound up; or (iii) where a fund has launched but has been unsuccessful in raising the appropriate seed capital for sustainability.

While it has been CIMA’s practice before the issuance of this new Regulatory Procedure to generally grant an audit waiver to mutual funds in respect of the stub period where a regulated mutual fund had been active but wished to surrender its mutual fund licence or certificate of registration prior to the end of its current financial period, CIMA’s practice, with effect from 1 October 2015, will be to require mutual funds to carry out an audit for any stub period.

How Does this Affect You?

If you are an operator of a Cayman Islands regulated mutual fund that has ceased to carry on business or intends to cease to carry on business and do not wish to carry out an audit for any stub period, please contact your usual Walkers contact as soon as possible to advise you on how the fund should make its CIMA deregistration application and application for an audit waiver before 1 October 2015.
For more on this story go to:
http://www.mondaq.com/caymanislands/x/426888/Fund+Management+REITs/CIMA+Deregistrations+and+Applications+for+Audit