The Ministry of Financial Services, Commerce and Environment had four bills – one involving changes to the Monetary Authority Law, two regarding regulations for mutual funds, and one relating to the filing of company directors and officers – that recently were debated and passed in the Legislative Assembly (LA).
Financial Services Minister Wayne Panton said the legislation will bolster Cayman's reputation as a premier international financial centre.
'These amendments aim to affirm our position as a premier centre for global financial services and a global leader in international investment funds, and we intend to build on our market dominance, particularly with our new AIFMD regime', he said.
Both The Securities Investment Business (Amendment) Bill 2015 and The Mutual Funds (Amendment) Bill 2015 are designed to establish an opt-in regime for regulating Cayman Islands-domiciled investment funds and managers connected to the European Union (EU).
This is intended to facilitate the extension of the EU's Alternative Investment Fund Managers Directive (AIFMD) passport to the Cayman Islands. The passport would allow Cayman-based funds to be marketed across the EU and eliminate reliance on private placement in each EU member state through the National Private Placement Regime (NPPR), which may no longer exist after 2018.
Although much of Cayman's investment funds business stems from the US, a significant element is EU-connected and uses the NPPR. Cayman's new AIFMD regime is designed to provide a future pathway between Cayman Islands-domiciled investment funds and managers, and the EU, with the intention of maintaining Cayman's leadership, and further growing its share, of the global mutual funds sector.
The Companies (Amendment) Bill 2015 calls for modest amendments to existing legislation in order to extend the deadline for filing changes to a company's register of directors and officers and establish a maximum penalty for failing to meet that obligation. This is intended to provide greater certainty with respect to the penalty regime, and thereby promote greater compliance.
Furthermore, the Bill alters sections 55 and 56 of the current Companies Law (2013 Revision) to require companies to provide the Cayman Islands General Registry with a register of directors and officers within 60 days of the first appointment of any director or officer.
In addition, companies have to notify General Registry of changes in the information contained in the register within 60 days of the change. Breaches to such requirements result in a CI$500 penalty.
The Monetary Authority (Amendment) Bill 2015 transfers the responsibility for certain functions related to the Currency Board from the Financial Secretary to the Financial Services Minister and the Finance Minister, based on the creation of the Financial Services Ministry in the 2009 Cayman Islands Constitution.
In addition, important changes were made in the Bill to replace references to the 'Governor in Cabinet' with 'Cabinet', reflecting the fact that the Constitution gives greater powers for elected members of Cabinet to set policy on behalf of the country.
The four bills were passed on 12 August, during the LA's second meeting of the 2015/16 session, and they are expected to be gazetted shortly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.