The Cayman Islands Government has passed the Securities Investment Business (Amendment) Law, 2019 (the “Amendment Law”) which introduce important changes to the regulatory and supervisory framework applicable to those persons registered as ‘excluded persons’ under the Securities Investment Business Law (2019 Revision) (“SIBL”) including Cayman Islands fund managers, investment advisers and broker dealers (“Excluded Persons”).
AML/CFT reporting forms due by 15 August 2019
The Cayman Islands Monetary Authority (“CIMA”) has set out a requirement for all currently registered Excluded Persons to complete and submit two detailed reporting forms relating to AML and CFT risks and processes (the “AML/CFT Forms”). The AML/ CFT Forms must be submitted through the Cayman Islands registered office of the Excluded Person by 15 August 2019. An Excluded Persons that fails to file the AML/CFT Forms will not be considered for re-registration as a Registered Person (as explained below).
Amendments to Securities Investment Business Law
SIBL, as amended by the Amendment Law, requires that all existing Excluded Persons re-register as “Registered Persons” by 15 January 2020. The application form must be submitted through the Cayman Islands registered office by 15 January 2020.
The scope of the excluded activities has not changed, so an entity eligible to be an Excluded Person will be eligible to re-register as a Registered Person on the same basis. However, CIMA will consider such re-registration application on its merits in accordance with new powers of oversight and enforcement. Re-registration is subject to the applicant:
- being in good standing under the current SIBL;
- having shareholders, directors and senior officers who are deemed by CIMA to be fit and proper persons;
- having a minimum of two directors;
- having directors in good standing that are currently registered or licensed under to the Directors Registration and Licensing Law, 2014 (as amended); and
- filing the AML/CFT Forms on or before 15 August 2019.
Another key consequence of the Amendment Law is that a Registered Person who is a ‘relevant entity’ under the International Tax Co-operation (Economic Substance) Law, 2018 (the “ES Law”) and who acts as a discretionary manager of an investment fund (as defined under the ES Law) will be deemed to be carrying on the relevant activity of ‘fund management business’ for the purposes of the ES Law and, accordingly, will generally be subject to the economic substance test set out in the ES Law.
If you have any questions regarding the above, please feel free to contact your Sertus Client Services Representative or contact us at email@example.com.