Private Funds Law FAQs Update - AIVs Registration and Audit Requirements (2020-08-12)

Summary

This is a CIMA general industry notice from 12 August 2020 updating the Private Funds Law FAQs, specifically addressing Alternative Investment Vehicles (AIVs). It is interpretive and clarificatory guidance rather than new law, explaining how existing Private Funds Law (PFL) registration and audit obligations apply to AIV structures, and it points readers to the fuller FAQ document for more detail.

• Registration: A Cayman-domiciled AIV sitting under a non-Cayman main fund must register as a stand-alone Private Fund under the PFL if it meets the definition of a Private Fund.
• Audit obligation: The notice explains how such a Private Fund can satisfy its statutory audit obligation under section 13(1) of the PFL when it forms part of a structure involving a non-Cayman main fund or other Cayman AIVs.

Several acceptable ways to meet the audit requirement are set out:

• Submitting stand-alone audited financial statements with the Fund Annual Return (FAR).
• Submitting the non-Cayman main fund's consolidated audited financial statements, together with the FAR.
• Where multiple Cayman AIVs are registered as private funds under a common non-Cayman main fund, having those funds group-audited separately from the main fund, or included within clearly identified consolidated financials of the main fund.

The notice also confirms that the non-Cayman main fund and other non-Cayman entities included in the consolidated financials are not themselves subject to PFL regulatory obligations.

Key obligations

• A Cayman AIV that meets the definition of a Private Fund must register under the PFL as a stand-alone Private Fund.
• A Private Fund (including one that is an AIV under a non-Cayman main fund) must have its accounts audited annually by a CIMA-approved auditor pursuant to section 13(1) of the PFL.
• The Private Fund must submit its audited accounts together with the Fund Annual Return (FAR) to CIMA within six months of the end of each financial year.
• Where audits are satisfied via consolidated or group financial statements, such statements must be signed off by a CIMA-approved auditor and must clearly identify which private funds are included, with each private fund still submitting the FAR.

Applies to

Private Funds, Alternative Investment Vehicles (AIVs)

Deadlines

• within six months of the end of each financial year: Deadline for a Private Fund to submit its audited accounts along with the Fund Annual Return (FAR) to CIMA.