Regulatory Procedure - Cancellation of Licences or Certificates of Registration for Regulated Mutual Funds

Summary

This is a CIMA Regulatory Procedure (dated August 2022) that sets out the practical steps and documentation regulated mutual funds must submit to CIMA when applying to cancel their licence or certificate of registration. It should be read together with the related CIMA Rule on cancellation and the Regulatory Policy on audit exemption.

Scope of Application

• Funds ceasing business
• Funds being voluntarily or court-liquidated
• Funds merging
• Funds converting to another fund type (e.g. single investor fund, registered private fund) or non-fund arrangement
• Funds transferring to another jurisdiction
• Funds that never carried on business

Good Standing and Core Requirements

A fund must be in 'good standing' (fees paid, audited financials filed, no outstanding queries) before its licence or certificate can be cancelled.

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

Scenario-Specific Documentation

Additional, scenario-specific documentation requirements apply depending on the reason for cancellation, including various affidavits from operators or liquidators and, where relevant, stamped winding-up notices and liquidator consents under the Companies Winding Up Rules. These scenarios include:

• Cessation of business
• Voluntary liquidation
• Court-supervised liquidation
• Jurisdictional transfer
• Never having carried on business
• No longer meeting the mutual fund definition
• Merger
• Master fund status changes

The document also addresses the audited accounts a fund must provide before cancellation, covering the period from the last filed year-end to final distribution or final NAV calculation, unless an audit waiver applies. It notes that a simultaneous registration or re-registration filing may be needed where a fund converts to a private fund, single investor fund, or master fund. CIMA retains discretion to request additional information before approving cancellation.

Key obligations

• A fund seeking cancellation must be in good standing on the cancellation date (fees paid, audited financials filed, no outstanding queries or regulatory filings).
• A fund must notify the Authority, within the timeframe prescribed in the related Rule, that it has ceased or will cease business, to avoid administrative fines.
• A fund must submit the core requirements for any cancellation: the original licence/certificate of registration (or an affidavit if lost), the prescribed surrender fee, and a certified copy of the resolution/determination/consent stating the date the fund ceased or will cease business.
• Depending on the reason for cancellation, the fund (or its operators/liquidators) must submit the specified additional documentation, e.g. affidavits confirming compliance with constitutive/offering documents and that investors/creditors were not prejudiced, stamped winding-up notices and liquidator consents (CWR Forms 19/20), court winding-up orders and liquidator reports, confirmation of regulatory approval in the receiving jurisdiction (for transfers), or letters from administrators/managers/auditors (for funds that never carried on business).
• Unless an audit waiver applies, the fund must provide audited accounts covering the period from the last filed year-end to the date of final distribution or final NAV calculation (with a subsequent events note confirming final distributions).
• Where a third-party liquidator is appointed, final audited accounts must at minimum cover the period from the last filed year-end to the liquidator's appointment date.
• Where a fund's conversion (e.g., to a registered private fund or master fund re-registration) requires a simultaneous registration/re-registration, that application must be filed with the Authority (via Registrations@cima.ky) at the same time as the cancellation application.

Applies to

regulated mutual funds, operators of regulated mutual funds, master funds, single investor funds, registered private funds, voluntary and third-party liquidators of funds

Deadlines

• within the timeframe prescribed within the Rule: A Fund must notify the Authority that it has ceased or will cease business within the timeframe set out in the related CIMA Rule, to avoid incurring administrative fines.