August 10, 2021

Attention Cayman Private Funds Operators: Complete Your FAR Filing Now!

By Kerry Stegman, Manager, Alternative Investment Group

Attention Cayman Private Funds Operators: Complete Your FAR Filing Now! Alternative Investments

The Cayman Islands Monetary Authority (CIMA or the Authority) recently announced that the new Fund Annual Return (FAR) forms are available for submission for funds registered under the Cayman Islands Private Funds Act (2021 Revision) (the Act). CIMA also released a new Operator Declaration that must be filed along with the FAR form. The deadline for filing is September 30, 2021.

FAR filings should be submitted by a CIMA-approved auditor or designated person. That person is responsible only for the submission to CIMA; it’s up to the fund’s operators to ensure the form is accurate and complete.

Private Funds Registered with CIMA need to Submit:

  • A FAR form, which must be filed within six months of the regulated fund’s fiscal year-end. To file, complete and submit form PFR-049-77 via the Authority’s Regulatory Enhanced Electronic Forms Submission (REEFS) system. A maximum of three one-month extensions can be requested from the Investments Supervision Division. This Excel-based form requests information about the investment adviser; the fund’s service providers; the number, jurisdiction and type of investors; and financial information, which is generally included and available on the fund’s financial statements. Operating information, such as a fund’s primary and secondary investment strategy, number of operator meetings held during the year, and existence and number of side letters with investors, is also requested on the form.
  • The fund’s annual audited financial statements, which should be submitted as a PDF attachment via the REEFS system. Financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) or the generally accepted accounting principles (GAAP) of the United States of America, Japan, Switzerland, or a “non-high risk” jurisdiction. Further, the annual audit must be carried out in accordance with the International Standards on Auditing (ISA) or the generally accepted auditing standards (GAAS) of the United States of America, Japan, Switzerland, or a “non-high risk” jurisdiction.
  • A signed operation declaration to confirm in the annual return that it has complied with sections 16 (valuation), 17 (safekeeping of assets), and 18 (cash monitoring) of the Private Funds Act.

The above requirements do not apply to a private fund until it receives capital contributions for investment. However, the Private Funds (Amendment) Regulations, 2021 require fund operators to file a declaration with CIMA that attests to this fact within six months of the fund’s fiscal year-end.

Obligation to Inform CIMA of Material Changes

If any changes occur that materially affect the submitted information in the marketing materials, summary terms, or offering document, fund operators must notify the Authority within 21 days. A change to any information that a prospective investor might take into account when making an informed decision is considered a material change.

Other Filings

For operators of newly registered funds under the Act, be sure your auditor issues a consent letter to be filed with CIMA by the fund’s Cayman legal counsel. Ensure the Cayman auditor consent letter appropriately specifies that the fund is registered under the Private Fund Act versus the Mutual Fund Law.

CIMA has provided a detailed completion guide to assist fund operators in completing the FAR. If you have any questions or need further clarification regarding the preparation or filing of the FAR or other CIMA requirements, please reach out to a Marcum assurance team member.

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Alternative Investments