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Mutual funds registered with the Cayman Islands Monetary Authority
(CIMA) are required to file audited accounts on an annual
basis. A fund may, in certain circumstances, apply for its
registration with CIMA to be terminated. Where an application for
deregistrations financial year, it has been s policy to waive the
requirement for audited accounts to be filed for the partial year
of operation, although CIMA has always been entitled to exercise
discretion in this regard.
In March 2015 CIMA issued an updated Regulatory Procedure on the
cancellation of mutual fund licenses and registration. At the
same time, CIMA announced that, with immediate effect, it would no
longer be granting waivers in respect of the requirement to file
audited accounts for the stub period prior to the application for
deregistrations operations through to its deregistration.
Strict application of the requirement for a stub audit has created
difficulties for some funds. Funds that have previously paid
out investors but have not completed their deregistration may
not have provided for the resulting audit costs. Other
issues have arisen as a result of the lag between the end of a
given period and the time it takes to produce audited financial
statements for that period.
In response to industry feedback, CIMA has therefore
confirmed to Cayman Finance that it will delay the
implementation of its new approach until 1 October 2015.
Funds considering deregistration with CIMA should have this date
in mind when determining when to initiate the deregistration
process. As things stand, in order to be eligible to apply
for a waiver of the requirement to file audited accounts for the
2015 stub period, a deregistration application must be submitted
prior to 1 October 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
