Rule - Cancellation of Licences or Certificates of Registration for Regulated Mutual Funds and Private Funds (August 2022)

Summary

This is a CIMA Rule, issued under section 34(1)(a) of the Monetary Authority Act, setting out requirements for how regulated mutual funds and registered private funds must notify the Authority when they intend to stop operating, have ceased operating, or never commenced business, as a step toward cancellation of their licence or certificate of registration. It applies to all Funds regulated under the Mutual Funds Act (MFA) or the Private Funds Act (PFA), and should be read alongside the related Regulatory Procedures for cancellation of licences/registrations and the Regulatory Policies on audit exemption.

• Ceasing business date: The Rule defines when a Fund is treated as having ceased carrying on business: generally the date stated in a resolution of operators, shareholders or unit holders, or the date of a liquidator's appointment if one has been appointed, unless CIMA has grounds to believe another date applies or no resolution was filed.
• Notification requirement: Timely notification to CIMA is required in these circumstances.
• Cancellation requirements: Payment of a surrender fee and submission of prescribed documentation are required to complete cancellation.
• Enforcement: Breach of the Rule can result in penalties under section 34 of the MAA and other enforcement action under CIMA's enforcement manual, the MFA or the PFA.

The Rule takes effect on the date of its publication in the Cayman Islands Gazette, though that specific gazette date is not stated in this document.

Key obligations

• A Fund must notify the Authority within 21 days from the date it ceases (or intends to cease) carrying on business as a Fund under the MFA or PFA.
• A Fund that has never carried on business must notify the Authority for cancellation of its licence or certificate of registration within 21 days from the date of the resolution acknowledging it has never carried on business and has no intention to commence business.
• To cancel its licence or certificate of registration, a Fund must pay the surrender fee and submit all documentation prescribed by the Authority in the applicable Regulatory Procedure.
• A Fund should ensure a resolution (or equivalent constitutional document) stating the date of cessation or intended cessation is passed and filed with the Authority, as this date determines the cessation date for regulatory purposes.

Applies to

regulated mutual funds, registered private funds, EU connected funds (as included within regulated mutual funds)

Deadlines

• 21 days from the date the Fund ceases to carry on business: Notification to CIMA that the Fund intends to cease or has ceased carrying on business as a Fund.
• 21 days from the date of the resolution: Notification to CIMA for cancellation where a Fund has never carried on business and has resolved not to commence business.
• date of publication in the Cayman Islands Gazette: Effective date of this Rule.