New Deregistration Rules For Cayman Islands Regulated Funds

The Cayman Islands Monetary Authority (“CIMA”) has recently issued an updated rule and regulatory procedure in respect of the cancellation of licenses or certificates of registration for regulated mutual funds and registered private funds respectively.

The main changes relate to improved clarity in respect of the timing of the deregistration process and removing the option to place a fund in either a ‘'License under Termination'' (“LUT”) or ‘'License under Liquidation” (“LUL”) status with CIMA.

Under the previous deregistration process, a fund could be placed in LUT or LUL once it had decided to cease trading or to liquidate but before it had completed the full deregistration process.  Provided that a fund did this before 31 December in any given year, the fund would benefit from a reduction in annual fees and would have a prescribed period of time within which to complete the full deregistration process. However, under the new deregistration rules, annual fees