The Fund Annual Return is required of both open-ended mutual funds and closed-ended private funds registered with CIMA — but the specific rules differ between the two. Understanding which rules apply to your fund is essential to filing correctly. Here is a clear side-by-side comparison.
Background: Two Acts, Two Frameworks
Cayman Islands investment funds operate under two pieces of legislation:
- Mutual Funds Act (2025 Revision) — governs open-ended funds
- Private Funds Act (2025 Revision) — governs closed-ended funds, which came into force on 7 February 2020, bringing many previously unregulated private equity, venture capital, and real estate funds under CIMA oversight for the first time
Both acts require an annual FAR filing, but the forms, submission rules, and specific requirements differ in several important ways.
The FAR Form
Mutual Funds | Private Funds | |
Form reference | FAR Form 4.0 (FAR-016-22-04) | PFR-049-77 or PFR-049-77-02 |
Format | Excel (downloaded via REEFS) | Excel (downloaded via REEFS) |
Completion Guide | Mutual Fund FAR Completion Guide | Private Fund FAR Completion Guide |
Related Fund Entity section | Separate (legacy forms) / Combined (FAR 4.0) | Combined within the main form |
The mutual fund FAR was updated in November 2020 (Form 4.0) and is required for all funds with a year-end of 30 June 2020 or later. The private fund FAR was first released in July 2021 and was further updated in February 2022 to incorporate the Related Fund Entity section.
Who Can Submit?
This is one of the most practically significant differences:
For mutual funds: Only the fund's CIMA-approved local Cayman auditor may submit the FAR to CIMA. There is no flexibility here.
For private funds: The FAR may be submitted by the CIMA-approved local auditor or by any other designated local service provider — such as a Cayman-licensed administrator, registered office, or fiduciary services firm. This gives private fund operators more flexibility in how they manage the filing workflow and who coordinates the process.
The Operator Declaration
This requirement applies to private funds only. When filing the FAR, a private fund operator must also submit a signed Declaration confirming compliance with:
- Section 16 — valuation of assets
- Section 17 — safekeeping and title verification of assets
- Section 18 — cash monitoring
There is no equivalent declaration requirement for mutual funds under the Mutual Funds Act.
Filing Deadline and "No Capital Drawn" Situations
Both fund types must file within six months of their financial year-end. However, the treatment of early-stage or inactive funds differs:
Mutual funds that have passed their first financial year-end but have not yet launched (i.e., have not accepted investor subscriptions or commenced trading) must apply to CIMA for an exemption from the audit requirement.
Private funds that have not yet drawn down capital from investors for investment purposes are not required to file audited accounts for that period — but they must still file a Declaration with CIMA within six months of their year-end, confirming that no capital has been drawn. This is a frequently overlooked requirement for newly registered private funds.
Extended First Period
Both fund types may have an extended first audit period of up to 18 months from the commencement of operations (for both the first and final periods). This is particularly relevant for private funds launched mid-year.
Fee Structure (2026 Onwards)
As of 1 January 2026, CIMA revised its fee structure upward for all registered funds. The annual fee for registered funds increased from CI$3,675 to CI$4,125. FAR filing fees for years ending before 31 December 2025 remain at the prior rates. Managers should confirm current fees directly on the CIMA website or through their service provider.
Key Takeaway
Whether you are operating a mutual fund or a private fund, the FAR is a complex document that must be completed accurately and submitted on time. The differences between the two frameworks — particularly around who can submit, the operator declaration, and the treatment of pre-launch periods — mean that a cookie-cutter approach to FAR preparation will leave gaps.
A purpose-built FAR validation tool helps catch errors specific to each fund type before they reach CIMA's automated rejection system.
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All blog posts are for informational purposes only and do not constitute legal, regulatory, or compliance advice. Fund operators should always confirm current requirements with CIMA or their legal and regulatory advisors.