Associate Hugh Anderson discusses the latest M&A activity involving Cayman Islands entities licensed and regulated by the Cayman Islands Monetary Authority.
M&A activity in the Cayman Islands is often related to the acquisition or listing of Cayman companies that are not regulated in the Cayman Islands. Typically these sorts of transactions do not require any approval from Cayman regulators. Recently however there have been a number of well publicised transactions involving Cayman entities licensed and regulated by the Cayman Islands Monetary Authority or CIMA. Such transactions involving the change of control (or any dealing in the shares) of an entity regulated by CIMA, will require the prior consent of CIMA.
Some recent and notable examples of these sorts of transactions are UBS's sale of its alternative fund services business to MUFG, the sale of a large part of HSBC's Cayman banking book to Butterfield, as well as numerous sales of mutual fund administrator / fiduciary businesses (including those of Appleby and Ogier).
It is perhaps a consequence of the recent spike in regulated M&A activity in Cayman that CIMA published late in 2015 a specific regulatory policy dealing with the criteria for approving changes in ownership and control. While the policy does not contain any surprises for those who have had recent engagements with CIMA on regulated transactions, it does clarify the level of due diligence required on any incoming shareholders and the factors that will be taken into consideration by CIMA in assessing a particular transaction.
In all cases the earlier the relevant parties engage with CIMA the better. CIMA will have a keen interest in learning more about the purchasers, the ownership structure, any new directors or officers involved in carrying on the business and their plans for the business going forward. Walkers teams are regularly involved in assisting all stakeholders with the CIMA consent process and would be more than happy to speak with you if you are interested in a transaction involving a CIMA regulated entity.
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