Cayman Islands: CIMA Filings For Mutual Funds
Article by Bryan Hunter and Sophie Benbow From Appleby
The Cayman Islands Monetary Authority (CIMA) has published a new rule and regulatory procedure (New Rule) regarding the cancellation of a licence or certificate of registration of a Cayman Islands regulated mutual fund (Fund).
How do these changes affect the operators of a Fund?
The main effect of the New Rule is to create a fixed deadline for submitting an application to CIMA for the deregistration of a Fund in cases where the Fund intends to or has ceased carrying on business pursuant to the Mutual Funds Law (as revised) (Mutual Funds Law). The New Rule requires an application to be made on the earlier of:
21 days from the date the Fund ceases to carry on business; or
before 31 December of the year the Fund ceases to carry on business.
When does the Fund “cease to carry on business”?
For the purposes of the New Rule, a Fund “ceases to carry on business” on the date stated in the resolution of the operators (directors or general partner or trustee), shareholders or unit holders where it is resolved that the Fund will cease or has ceased to carry on business as a Fund in or from the Cayman Islands, unless CIMA has reason to believe that the relevant date is other than that indicated in such resolutions. Should a liquidator be appointed to a Fund, CIMA will deem the Fund to have ceased to carry on business on the date of such appointment.
Do we need an audit or can we receive an audit waiver?
If a Fund has ceased to carry on business or intends to cease to carry on business this calendar year, it is only possible to apply for an audit waiver in respect of a financial year or any part of a financial year (i.e. a stub period) prior to 1 October 2015.
Unless a Fund qualifies for an audit waiver (e.g. it has failed to launch and can evidence this) 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 the winding up where a third party liquidator has been appointed or the date of its final distribution if no third party liquidator has been appointed. It will no longer be possible, therefore, to request an audit waiver after 1 October 2015 on the grounds that the Fund has ceased carrying on business.
What do we need to consider?
If the operators of the Fund wish to deregister a Fund this year, without completing an audit, operators of Funds are strongly advised to consider whether they are able to bring forward deregistration applications which they may have otherwise deferred to later in the year to coincide with the 1 October 2015 deadline.
All of CIMA’s standard documentary requirements must be met and an application for an audit waiver will need to include the currently prescribed audit waiver fee of US$609.76.
