Updated Private Fund Audit Waiver Policy (2022-03-16)

Summary

This is a short industry notice from the Cayman Islands Monetary Authority (CIMA) announcing an update to its Regulatory Policy on Exemption from Audit Requirement for a Private Fund. The update removes paragraphs 5.4.1 and 5.4.2 (and the related paragraphs 6.1.1 and 6.1.2), which had dealt with private funds that had not yet launched and had not received any investor capital contributions.

The change reflects that, under section 3(2) of the Private Funds Act (2021 Revision), Part 3 of the Act -- which contains the audit requirement in section 13 -- does not apply to a private fund until it receives capital contributions from investors. Because such pre-launch funds have no audit obligation in the first place, there is no need for them to apply for an audit waiver.

• New requirement: Private funds that have not received capital contributions should, per the Private Funds (Amendment) Regulations, 2021, submit a declaration to that effect to the Authority.
• Submission method: This is a simple notification submitted by email and carries no fee.
• Effect: This replaces the prior audit waiver application route for these specific circumstances.

Key obligations

• Private funds that have not launched and have not received any capital contributions from investors must submit a declaration (as specified in the Private Funds (Amendment) Regulations, 2021) to CIMA instead of applying for an audit waiver.
• Such declarations must be submitted to CIMA via email to ereporting@cima.ky.

Applies to

private funds