De-registration of LUT and LUL Funds (2017-10-17)

Summary

This is a general industry notice from CIMA explaining its procedures for de-registering or cancelling licences of regulated mutual funds that have been placed into 'Licence Under Termination' (LUT) or 'Licence Under Liquidation' (LUL) status. It applies to Regulated Mutual Funds, including their operators and liquidators, that are undergoing winding down or liquidation. The notice describes CIMA's ongoing review process and the consequences of failing to provide required updates or outstanding documents or fees during this period.

• Six-month contact trigger: CIMA will contact a Fund via its Registered or Principal Office if it remains in LUL or LUT status for more than six months, seeking outstanding documents and fees. Extensions may be granted where warranted.
• Operator/liquidator obligations: Operators or liquidators are expected to proactively provide comprehensive ongoing updates on the status and progress of the fund's winding down or liquidation during this six-month period.
• Consequence of non-response: Failure to respond or provide updates within the agreed or stipulated timeframe will result in CIMA cancelling the Certificate of Registration or Mutual Fund Licence as an administrative action under section 30(16) of the Mutual Funds Law (MFL).
• Further regulatory action: Where wrongdoing or fitness-and-propriety concerns arise regarding a fund in LUL/LUT status, CIMA may pursue further regulatory action, and an administrative cancellation may be considered in future fitness and propriety assessments of the fund's operators.

This is primarily an informational/procedural notice but does create practical compliance obligations for funds in these statuses.

Key obligations

• Operators or liquidators of Funds in LUT or LUL status must provide comprehensive ongoing updates to the Authority on the status and progress of the fund's winding down or liquidation during the six-month period following entry into LUL/LUT status.
• Funds in LUL or LUT status must provide outstanding documents and/or fees requested by the Authority within the period agreed with or stipulated by the Authority, or risk cancellation of their Certificate of Registration or Mutual Fund Licence.

Applies to

Regulated Mutual Funds, Fund operators, Liquidators

Deadlines

• six months: Period after which a Fund remaining in LUL or LUT status will be contacted by CIMA to collect outstanding documents/fees, and during which operators/liquidators must provide ongoing updates on winding down or liquidation progress.