Regulatory Procedure - Cancellation of Licences and Certificates of Registration of Regulated Mutual Funds (March 2015)

Summary

This is a CIMA regulatory procedure, dated March 2015, that sets out the practical steps and documentation a regulated mutual fund (licensed under section 5 or registered under sections 4(3) or 4(1)(b) of the Mutual Funds Law) must follow to have its licence or certificate of registration cancelled.

• The fund is winding up
• The fund has never carried on business
• The fund is ceasing to trade
• The fund is merging with another fund
• The fund is converting to an exempted fund, single-investor fund or closed-ended fund
• The fund is transferring to another jurisdiction
• The fund is a master fund seeking de-registration

The procedure explains that a fund must be in good standing (all fees paid, audited financials filed, no outstanding queries) before cancellation can occur. It describes two interim statuses - Licence Under Termination (LUT) and Licence Under Liquidation (LUL) - which affect whether annual fees continue to accrue while cancellation is being processed.

• Core requirements applicable to every cancellation: Return of the original licence or certificate, or an affidavit if it is lost
• Payment of the prescribed surrender fee
• A certified resolution stating the cessation date

• Additional documentation depending on reason for cancellation: Cessation of business
• Voluntary or court-supervised liquidation
• Continuation as an exempted fund
• Transfer abroad
• Never having carried on business
• Conversion to single-investor or closed-ended fund
• Merger
• Master fund de-registration

Funds not qualifying for an audit waiver must provide audited accounts covering the period up to the start of winding up or final distribution, and CIMA may request additional information. A master fund with feeder funds still under LUT/LUL status will not be de-registered until those feeder funds are fully terminated. The document is procedural guidance describing CIMA's expectations and process rather than a standalone piece of legislation.

Key obligations

• A fund must file a request with CIMA to cancel its licence or certificate of registration once it has ceased to carry on business, within the timeframe prescribed in the related Rule on Cancellation of Licence or Certificate of Registration, to avoid incurring annual fees and penalties.
• A fund must be in good standing with CIMA (all prescribed fees paid, all required audited financial statements submitted, no outstanding queries or regulatory filings) on the date of cancellation.
• A fund must submit core cancellation requirements regardless of reason: return the original licence/certificate (or an affidavit if lost), pay the prescribed surrender fee, and provide a certified resolution of operators/shareholders/unit holders stating the cessation date.
• Depending on the reason for cancellation, the fund must submit specific additional documentation, such as: an affidavit on cessation of business confirming proper redemption of investors and no prejudice to investors/creditors; CWR winding-up notice and liquidator's consent forms for voluntary liquidation; the Grand Court's winding-up order and liquidator reports for court-supervised liquidation; affidavits and constitutive/offering document evidence for continuation as an exempted, single-investor, or closed-ended fund; confirmation of regulatory approval in the destination jurisdiction for cross-border transfers; and merger-specific documentation (cover letter, resolution, affidavit, updated offering documents, certificate of merger) for dissolving and surviving funds in a merger.
• A master fund with regulated feeder funds under LUT or LUL status may not be de-registered until those feeder funds are completely terminated.
• Unless exempt under an audit waiver, a fund must provide audited accounts from the last filed financial year end through to the commencement of winding up (or final distribution date if no third-party liquidator is appointed).
• A fund must provide any additional information CIMA requires in order to process the cancellation of its licence or certificate of registration.

Applies to

regulated mutual funds, licensed mutual funds, registered mutual funds, master funds, exempted mutual funds, closed-ended funds, single investor funds