Master fund registration deadline extended

The Cayman Islands government has extended the deadline for the registration of master funds by 60 days to 21 May, 2012. The extension was published in the Gazettes on 21 March, 2012.

The Mutual Funds (Amendment Law) 2012 requires new and existing Cayman Island master funds with one or more regulated feeder fund to register with the Cayman Islands Monetary Authority. The extension allows more time for firms with existing master funds as of 22 December, 2011, to comply with the law.

In February, the government issued an advisory noting that Cayman master funds with only one CIMA-registered feeder fund (and no other investors) were intended to fall within the scope of the law, to clarify a disagreement in interpretation between the government and CIMA on the one side and several practitioners on the other.

The government said it would pass a further amendment on the issue.

Before the new law, many master funds benefitted from an exemption from registration, if they had no more than 15 investors. The new requirements apply to master funds that hold investments and conduct trading activities, issue equity interests that are redeemable at the option of the investors, including the feeder fund, and have CIMA-registered feeder funds within their structure.

Master funds subject to the amendment must file a Form MF4 with CIMA and pay an annual registration fee of CI$2,500. They must also file an annual audited financial statement signed by a CIMA-approved auditor and submit a Fund Annual Return Form within six months of the fund’s fiscal year end.