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
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
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.
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.
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