Ruan van Vuuren
Cayman Mutual Funds – Updates to the Financial Annual Return (FAR) and Request for Filing Extensions
The Cayman Islands Monetary Authority (“CIMA”) recently issued a notice advising that the FAR form for Mutual Funds has been updated as outlined in the Mutual Funds (Annual Returns) (Amendment) Regulations, 2020 (“Mutual Funds FAR Regulations”). CIMA also informed with a separate notice that the procedures to request an extension to file audited financial statements and the FAR has been updated.
Revised FAR Form
The revised FAR form 4.0 has been updated to collect additional information and data as required within the Mutual Funds FAR Regulations which is in line with the recent initiatives and updates to the Cayman funds regime.
Highlights of the updates to the revised FAR form 4.0:
options to select other accounting (GAAP) and auditing (GAAS) standards of non-high risk jurisdictions;
confirmation if the Investment Manager, NAV Calculation and RTA function is independent;
name and country of the regulator for the NAV Calculation and RTA Agent;
number of side letter arrangements with investors;
breakdown for all (previously only 10% or greater) investors, e.g. number, country, NAV, etc. Further grouping details are also required, e.g. domestic, retail (foreign/domestic), High Net Worth Individuals, PEPs (foreign/domestic), other natural persons, non-bank financial institutions, trusts, non-financial corporations, etc.
further breakdown for asset and liability allocation;
additional information for allocation of equity and debt securities, e.g. currency, counterparty sector, value of direct investments representing 10% or more of an entity, etc.
The revised FAR form 4.0 is required to be completed and submitted for funds with a financial yearend of 30 June 2020 or later.
At the date of this writing, CIMA has advised that amendments are still being made to the form and Completion Guide. When finalised and available, the revised FAR form 4.0 may be accessed on the CIMA website along with the Completion Guide here.
Request for extensions to file audited financial statements and the FAR
Effective 1 November 2020, requests for extensions to file audited financial statements may only be made via CIMA’s electronic REEFS platform with a new form (FXT-162-22). This new REEFS form replaces the previous process of email requests to email@example.com. This also means that only local Cayman service providers who has access to the REEFS portal may file these extension requests. Payment options now are only via local Cayman cheques or escrow payments within the REEFS portal (wire payments are no longer accepted).
The REEFS user guide may be accessed here. If you require more information on the audit extension process (the procedures and documentation required for 1st, 2nd or 3rd monthly extensions), please refer to the updated Mutual Fund FAQs here.
If you have any questions or would like to discuss this further, please get in touch with your usual IMS contact.