Increased MFAR reporting requirements for Cayman Islands funds
The Cayman Islands has recently introduced the Mutual Funds (Annual Returns) (Amendment) Regulations, 2020, which became effective on March 17, 2020. This introduced enhanced MFAR (or Mutual Fund Annual Return) reporting requirements for all Cayman Islands funds, both registered or licensed mutual funds as well as registered private funds.
Both mutual funds and private funds need to file an annual return each year ultimately six months after its financial year end (usually on or before June 30 with a financial year end of December 31). Certain financial and legal details need to be included. The details required for the annual return have been increased and going forward, the following is required to be included as well:
- Further details on service providers of the fund, such as the investment manager, the net asset value calculation agent and the registrar and transfer agent;
- Additional details on the type and specifics of the fund’s assets and liabilities, including (margin) accounts with brokers / custodians, accounts receivable / accounts payable, cash and direct investments if the fund holds more than 10% of an entity’s equity; and
- Details on the investors:
- Number of domestic investors (meaning Cayman Islands residents);
- Percentage of net asset value held by domestic investors;
- Total number of investors;
- Number and percentage of retail investors (foreign and domestic);
- Number and net asset value holdings of investors per type for the top five types (high net worth individuals, politically exposed persons (foreign and domestic), other natural persons, non-bank financial institutions, trusts, non-financial corporations);
- Number and net asset value holdings of nominee investors per type for the top five types (high net worth individuals, politically exposed persons (foreign and domestic), other natural persons, non-bank financial institutions, trusts, non-financial corporations);
- Number of investors and net asset value holdings per country for the top five countries; and
- Total number of side letters signed with investors.
We as the administrator typically arrange for the preparation of the MFAR, which is then filed with the Cayman Islands Monetary Authority by the fund’s auditor together with the audited financial statements. If you want to know more or are interested in how Circle Partners can assist you with the MFAR, please contact Gerben Oldekamp or Bastiaan Koelewijn.