The Cayman Islands Ministry of Financial Services on 18 July 2018 released a draft Bill for discussion purposes relating to amendments to the Securities Investment Business Law ("SIBL").
The proposed Bill seeks to address:
- Deficiencies in the Cayman Islands regulatory framework of Excluded Persons;
- Gaps highlighted in respect of the risks posed to the reputation of the Cayman Islands Monetary Authority ("CIMA") and the country's securities and investment business sector; and
- Areas for clarification in the SIBL that relate to Excluded Persons.
Here are five main items to be aware of:
- This Bill replaces the concept of an Excluded Person with two new classes of "Exempt Person" and a "Registered Person".
- It will allow for a natural person (being a human being, as distinguished from a person who is a corporation, club, society, association or other body created by law) to apply for a SIB License.
- At present Excluded Persons are required to register with CIMA, pay an annual fee of CI$5,000.00 (US$6,096.00) and submit a renewal form along with the fee. No other filings are required of Excluded Persons under the SIBL beyond the possible Anti Money Laundering audit report. For the most part therefore, the current regime allows for Excluded Persons to police themselves. Exempt Persons will not be required to register with CIMA in the way that Excluded Persons are currently.
- Registered Persons will need to register with CIMA much in the same way Excluded Persons do currently however their annual renewal will need to be submitted on or before 15 January (not 31 January as is the case with Excluded Persons).
- Should the Bill become Law, CIMA will have the power to refuse the registration of a Registered Person or otherwise impose conditions on a registrant at the time of registration. CIMA will also have the ability to direct the Registered Person or Exempt Person in relation to the securities investment business it carries on and in particular to cease/refrain from certain acts or pursuing a certain course of conduct.
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.