The private Funds (Annual Returns) Regulations, 2021 announced details on how to complete the annual return by Private Fund operators as required by CIMA.
Cayman Islands Private Funds came into force in February 2020 when the Cayman Islands Legislative Assembly passed the Private Funds Act (2020) into law. Subsequently, supplemental regulations namely The Private Funds (Annual Returns) Regulations, 2021 and Private Funds (Amendment) Regulations, 2021 were issued on March 25, 2021 requiring registered private funds (Private Funds) to submit a Fund Annual Return (FAR) to the regulator, the Cayman Islands Monetary Authority (CIMA), in respect of each financial year, within six months after the end of the financial year to which it relates or within any extension of that period as CIMA may allow.
Key Regulatory Updates
Notification to CIMA
Where the operator of the Private Fund has not received capital contributions from investors for the purposes of investment, the Private Funds (Amendment) Regulations, 2021 require the operator to notify CIMA within six months after the end of the financial year to which it relates.
Private Funds Annual Returns
The Private Funds (Annual Returns) Regulations, 2021 provide the contents of the annual return to be filed by Private Fund operators as required by CIMA. These include general operational, structural and financial information for the Private Funds. These regulations also set out the filing fees which must be paid along with submission of annual returns.
Annual returns should be submitted through the private fund’s auditor or such other designated person as may be approved by CIMA. The auditor, or designated person, will only be responsible for submitting each duly completed return received from the Private Fund to CIMA in a timely manner and will not be liable for the accuracy or completeness of the annual return submitted. It is therefore the funds responsibility to ensure accuracy and completeness of the annual returns.
When completing the annual return, the Private Fund should have regard to any explanatory material issued by CIMA. A Private Fund which has received capital contributions for the purpose of investment must confirm in the annual return that it has complied with sections 16 to 18 of the Private Funds Act (2021 Revision).
CIMA extends deadline for first filing of audited accounts and associated FAR form by Private Funds to September 30, 2021
On April 19, 2021, CIMA issued a notice extending the deadline for the first filing of audited accounts and the associated FAR form by all Private Funds to September 30, 2021. The notice also clarifies that Private Funds will not be subject to penalties for non-compliance with annual audit filing requirements prior to the revised deadline.
The extension relates only to the FAR forms for Private Funds. For the avoidance of doubt, FAR forms relating to open-ended mutual funds registered under the Mutual Funds Act (Revised) must still be filed within six months of the relevant financial year end.
CIMA Guidance Updated
The Cayman Islands Monetary Authority acts and regulations are accessible here.
How we can help
We provide full support to Cayman’s Private Funds for compliance with their regulatory duties for Cayman Islands domiciled Private Funds, including our custody services through our CIMA regulated Custodian.
To support the independent oversight with cash monitoring, we can provide independent fund administration services.
We provide support in the preparation and submission of FAR and CRS forms and will continue to monitor the development of all regulatory issues closely. We encourage you to subscribe to our Regulatory Updates to keep up to date with global regulatory changes affecting your business.
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