Fund Annual Returns and filings for sub-funds

Regulated funds are required to file a fund annual return (FAR) with the Cayman Islands Monetary Authority (CIMA), within six months of the financial year end (subject to any extension granted by CIMA). The return is submitted through the fund's auditor.

CIMA has recently passed an amendment to the Mutual Funds Law (Revised) of the Cayman Islands, the Mutual Funds (Annual Returns) (Amendment) Regulations, 2016 (Regulations). The Regulations clarify the position that a “sub-fund” of a regulated mutual fund includes any segregated portfolios, sub trusts and separate accounting classes (described in more detail below) and codifies CIMA's existing policy that a separate annual return should be submitted in respect of each sub-fund of a Cayman regulated mutual fund. 

Therefore a separate FAR should be filed (and a separate filing fee paid) for each of the following in a regulated mutual fund structure:

  • a segregated portfolio in a segregated portfolio company structure (SP);
  • a sub-trust of a trust in an umbrella or master trust structure (Sub-Trust); or
  • a class of shares, units or interests in a company, trust or partnership for which the fund maintains individually presented separate accounts (Separate Accounting Class). 

The Regulations confirm the fee for submitting a FAR is CI$300 (US$366) and that this will be payable in respect of the filing for each sub-fund i.e. each SP, Sub-Trust or Separate Accounting Class. However, the Regulations introduce a cap so that where a regulated fund has twenty-five or more sub-funds, the aggregate fee for the filing of all the returns of the sub-funds will be CI$7,500 (US$9,150).

CIMA has separately announced that it has enhanced the FAR notification process so that once a FAR has been filed, a confirmation of filing and notification that the FAR fee is due will be sent to the auditor that made the filing, all current directors (or the trustee in respect of a trust structure) of the fund, the fund’s registered office and the service provider identified by the fund as responsible for paying fees. The auditor itself does not pay the FAR fee and so this change will help ensure that funds (including sub-funds), through the relevant service provider, make timely payment of the FAR fee once the FAR has been submitted.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

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