CIMA issues new regulatory procedures for the deregistration of Cayman Islands investment funds
The principal changes in the new deregistration procedures relate to the timing of the deregistration process.
New deregistration requirements
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.
Who do these new deregistration procedures apply to?
The new deregistration procedures will apply to any new deregistration applications going forward. Any Cayman Islands 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.