CIMA issues new regulatory procedures for the deregistration of Cayman Islands investment funds - Waystone

      CIMA issues new regulatory procedures for the deregistration of Cayman Islands investment funds

      The Cayman Islands Monetary Authority (“CIMA”) has updated it’s Rule on the Cancellation of Licences or Certificates of Registration for Regulated Mutual Funds and Registered Private Funds regarding their deregistration with CIMA at the end of the life of the fund or where their regulatory status has changed (in certain limited circumstances).

      The principal changes in the new deregistration procedures relate to the timing of the deregistration process.

      Under the new deregistration procedures, although CIMA should be notified of a fund’s intention to deregister within 21 days of that determination, the fund must complete and file its final audit (or seek and be granted an audit waiver from CIMA), and be in good standing, before the deregistration documents may be filed. CIMA’s aim is to make the deregistration processing and approval a relatively quick and straightforward procedure.

      Previously a fund could be placed in License under Termination (“LUT”) or License under Liquidation (“LUL”) once it had determined to cease trading or to liquidate but before it had completed its final distributions and filed its final audit. Provided that this was done on or before 31 December in any year, the fund would benefit from either a reduction in, or complete waiver of, the CIMA annual fund registration fees for the following year. The fund would then have a prescribed period of time to complete its audit and file its deregistration documents.

      The new deregistration procedures will apply to any new deregistration applications going forward. Any funds which commenced their LUT or LUL status applications under the old procedures will still be able to take advantage of the fee concessions under those procedures.

      If you think you may be affected by this legislation or would like to discuss this further, please reach out to your usual Waystone representative or contact us below.

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