Madbury Lane Advisors Fund No. 3 Warning Notice (2018-08-22)

Summary

This is a public warning notice issued by the Cayman Islands Monetary Authority (CIMA) against two specific registered mutual funds, Madbury Lane Advisors Fund No. 3 (Reg. #5478) and Madbury Lane Advisors Fund No. 3 Offshore Investors (Reg. #5479), and addressed to their directors, Mr. Joseph A. Zock and Ms. Sarah Hunt. CIMA states the Funds have been in breach of the Mutual Funds Law (2015 Revision) for many years. The notice is being published because CIMA was unable to locate or correspond with the Funds' directors through normal channels.

• Audited accounts: Failing to prepare and submit audited accounts for 2006-2017 (sections 8(1) and (2)).
• Registration fees: Failing to pay annual registration fees and penalties for 2007-2018 (section 9).

The notice formally puts the directors on notice that CIMA proposes to cancel the Funds' mutual fund registrations under section 30(16) of the Law, on the basis that the Funds appear to have ceased to carry on, or never carried on, business as mutual funds. It also warns that the lack of communication/non-compliance may be taken into account when CIMA assesses the directors' fitness and propriety in relation to other regulated funds or licensees, or in future applications.

This document is specific to these two named funds and their directors rather than a general rule of broad application, but it illustrates CIMA's warning-notice and registration-cancellation process under the Mutual Funds Law. Recipients (or anyone with an interest) are given a limited window to make written representations before CIMA proceeds with cancellation.

Key obligations

• Directors of the Funds must submit any written representations opposing the proposed cancellation to CIMA's Managing Director within 30 days of receiving the Warning Notice, unless a longer period is requested and approved.
• Any request for an extension of the representation period must be submitted to CIMA within 10 days of receiving the Notice.
• The Funds remain obligated to prepare and submit audited accounts for the years ended 31 December 2006 to 2017 under sections 8(1) and (2) of the Mutual Funds Law.
• The Funds remain obligated to pay outstanding annual registration fees and penalties for 2007 to 2018 under section 9 of the Mutual Funds Law.

Applies to

mutual funds, directors of mutual funds

Deadlines

• 30 days of receiving this Warning Notice: Deadline for directors to submit written representations to CIMA opposing the proposed cancellation of the Funds' registrations.
• 10 days of receiving the Notice: Deadline to submit a request for an extension of the representation period, if needed.