On 1 July 2021, the Cayman Islands Monetary Authority (CIMA) made the private fund annual return form (FAR Form) available on its regulatory enhanced electronic forms submission (REEFS) system.
CIMA did not publish the FAR Form publicly meaning only a registered private fund (or a person authorised to act on its behalf) may access the FAR Form within the REEFS system.
As part of their ongoing regulatory reporting requirements, CIMA registered private funds established under the Private Funds Act 2020 are required to complete and file a first FAR Form by 30 September 2021. Going forward, the FAR Form will need to be completed and filed within six months of each relevant fund's financial year end.
What is the FAR Form and who can file this?
The statutory basis for requiring a private fund to complete and file a FAR Form is set out in the Private Funds (Annual Returns) Regulations 2021 (FAR Regulations).
The FAR Form is comprised of three headings each requiring specified information including:
Part A (General Information): details of the private fund, its legal structure, its service providers and non-identifying investor metrics;
Part B (Operating Information): the value of investments held, investment strategy, whether the fund's investments are listed, whether the fund has been subject to any regulatory investigation (or any of its related fund entities) within the reporting period and total number of side letters in place; and
Part C (Financial Information): the type of audit opinion issued, accounting principles used, total assets, opening and closing net asset value, capital contributions, payments, distributions, net income, details of asset allocation, leverage and allocation of debt and equity securities plus required statutory declarations as regards valuations, safekeeping of assets and cash monitoring.
The FAR Form, in excel format, is downloadable and may be completed by the fund operator who is also required to arrange the filing of the audited financial statements to which the FAR Form relates together with a declaration that the information contained in the FAR Form is accurate and complete. The auditor or person designated by the private fund (and as approved by CIMA) is responsible for submitting the completed FAR Form received from the operator of a private fund.
Applicable fees
The fee for filing the FAR Form is US$366 and an additional US$184 for each alternative investment vehicle1 and sub-fund of the private fund (see Regulation 4 (Fees) of the FAR Regulations).
General Comments
Failure to file a FAR Form on time may result in a US$24,400 fine. Therefore, ensuring early compliance with the FAR Regulations should be an important Q3 2021 priority for all CIMA registered private funds.
This regulatory reporting requirement is only relevant to private funds. CIMA registered mutual funds must complete their own fund annual reporting filings within six months of the fund's financial year end under the Mutual Funds Act 2020.
Footnote
1. Excluding an alternative investment vehicle itself separately registered as a private fund
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.