For an entity that is not a CIMA Registered Fund

In order to avoid 2022 annual Cayman Islands’ Registrar of Companies fees, a Voluntary Liquidator would need to have held the Fund’s final general meeting (FGM) before 31 January 2022. For a Limited Partnership, the final dissolution notice must be filed by this date.

For CIMA Registered Funds

If the fund makes filings to be placed into ‘License Under Liquidation’ by 31 December 2021, the 2022 annual CIMA license fee should be avoided. For a Master – Feeder structure this saving would be in the region of US$7,000.

Funds which have not commenced the de-registration process by filing the requisite documents and paying a deregistration fee prior to 31 December 2021 would therefore be due to pay the full 2022 annual CIMA fee.

Funds which are confirmed by CIMA as being in ‘Licence Under Termination’ (having commenced but not yet filed all of the deregistration documents with CIMA such as completion of the final stub period audit) will be required to pay half fees for 2022.

What are the CIMA audit requirements for a CIMA registered fund?

CIMA will no longer automatically grant audit waivers for a final stub period audit. Upon the payment of a fee of US$610, audit waivers may be considered in the following circumstances:

• a fund has not launched but does not wish to be de-registered;
• a fund has not launched and is being liquidated or wishes to be de-registered;
• a fund has launched but has been unsuccessful in raising sufficient capital for sustainability;
• a fund is unable to obtain audited accounts due to events such as bankruptcy proceedings, legal or regulatory enforcement actions;
• a fund has been placed in compulsory liquidation and the Authority is satisfied with the appointment of the liquidator and the scope of the liquidator’s review;
• a fund is being voluntarily liquidated and a third party liquidator has been appointed under terms that require a review of the period since the last financial year end for which an audit has been filed;
• a fund is transferring to another jurisdiction within six (6) months of its last financial year end for which an audit has been filed, or is due to be filed;
• a fund is dissolving by way of a merger within six (6) months of its financial year end for which an audit has been filed, or is due to be filed; or
• all investors in a fund have agreed to forego the audit for a part of a financial year (of more than six (6) months) and no more than ten (10) investors existed at any time during the part-period.

CIMA will require submission of the audited financial statements from the date of the last financial year (for which audited statements have been filed) either to the date the fund ceased to carry on business in or from the Islands or to the date of commencement of winding up where a third party liquidator(s) have been appointed. If no third party liquidator(s) have been appointed, the audit must cover to the date of final distribution or to the date that the final NAV was calculated, with subsequent events notes to confirm that the final distribution has been paid to investors.

Administrative Fines

CIMA registered funds should be mindful of the updated breach categories pursuant to the Monetary Authority (Administrative Fines) (Amendment) Regulations, 2020. The Rule on the Cancellation of a License or Certificate of Registration of Regulated Mutual Funds requires funds to apply for de-registration within 21 days from the date the fund ceases to carry on business or before 31 December of the year the fund ceases to carry on business. Failure to do so is now categorized as a minor breach under the amended regulations, resulting in potential fines between US$6,000 to US$25,000 depending on how quickly the breach is remedied.

When should I start planning?

Where a voluntary liquidation is non-contentious, does not have to de-register with CIMA, and all investors have been substantially redeemed in accordance with the statutory process in the Cayman Islands, it is possible to complete a straightforward Voluntary Liquidation process in approximately 60-90 days. Act now and this can be achieved before 31 December 2021.

More complex voluntary liquidations will undoubtedly take longer. However, West Bay Global Services is able to tailor proposals and take a commercial approach to best serve your needs.

*in order for the Voluntary Liquidation to be concluded by 31 January 2022 to avoid 2022 Registrar of Companies fees.

These dates represent FINAL deadlines. We recommend that you act by 31 October 2021 in order to allow sufficient time to complete the Voluntary Liquidation process

For a preliminary, complimentary consultation to help you understand the voluntary liquidation processes and time considerations, please contact us.

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