Walkers Global warns of termination of regulated mutual funds


Delays in commencing the deregistration and winding up process may ultimately hinder a Cayman Islands regulated mutual fund (a Fund) from maximising cost savings in relation to regulatory and service provider fees, Walkers Global said.

The firm advised that if anyone is considering winding up a Fund, it would be “prudent to start the process now with a view to completing it by year-end and minimising and/or precluding 2017 annual fees.”

Prior to October 1, 2015, where an application for deregistration of a Fund was made to Cayman Islands Monetary Authority (CIMA) before the end of the Fund’s financial year, CIMA routinely waived the requirement for audited accounts to be filed for the partial year of operation (stub audit).

Walkers said: “However, since that date, it is no longer possible to receive an audit waiver for the stub audit period. Further, there are very limited circumstances when CIMA will exercise its discretion to exempt a Fund from submitting audited financials.

“The strict application of the requirement to file a stub audit with CIMA means that, in addition to filing the core deregistration requirements and supporting affidavit before 31 December, the Fund must file the stub audit with the accompanying Fund Annual Return (FAR) Form and pay to CIMA the FAR filing fee on or before 31 December in order to complete the deregistration application.

“In this regard, it is imperative that the Fund engages with its auditors to address the stub audit preparations and timing to complete such filings with CIMA in conjunction with the deregistration application.”

A Fund that wishes to cancel its license or certificate of registration with CIMA must also be in good standing with CIMA on the date of the cancellation of the license or certificate of registration, Walkers advises.

Walkers Global, Cayman Islands, Funds, Regulated mutual funds, Cayman Islands Monetary Authority

Cayman Funds