- with readers working within the Banking & Credit industries
The Cayman Islands Monetary Authority (the Authority) has updated regulatory measures applicable to Virtual Asset Service Providers (VASPs), including the issuance of a Rule and a Statement of Guidance on market conduct for the VASP sector. These instruments, together with related amendments and repeals reflected in the Authority's online index of VASP regulatory measures, take effect in accordance with their stated commencement provisions.
Statutory and regulatory framework
Under section 34 of the Monetary Authority Act (2021 Revision) the Authority is empowered to issue and amend Rules, Statements of Principles and Statements of Guidance. Section 48 of the Act provides for the publication of a Regulatory Handbook that sets out the policies and procedures applied by the Authority in the performance of its regulatory and co-operative functions. The Regulatory Handbook includes a checklist of applicable instruments, including Rules, Statements of Principles, Statements of Guidance, Regulatory Policies, Regulatory Procedures and prescribed forms, relevant to the VASP sector.
The market conduct measures comprise both binding Rules and non-binding Statements of Guidance, the latter of which will be applied by the Authority as a benchmark when assessing compliance by regulated entities.
Key features of the market conduct measures
The newly published market conduct Rule and Statement of Guidance establish a regulatory framework for market conduct standards applicable to VASPs. The instruments:
- set out expectations for conflict management, appropriate disclosures, transparent communications and the fair treatment of clients and the public;
- reflect the Authority's approach to assessing compliance with these standards, including in the context of conduct risk and client-facing activities;
- repeal certain sections of the Virtual Asset Custodian and Virtual Asset Trading Platforms Rule and Statement of Guidance where those provisions are now addressed in the consolidated market conduct instruments, thereby avoiding duplication within the Handbook.
The Authority's index of VASP regulatory measures has been updated to identify recently added or amended items, providing practitioners with a checklist of in-scope instruments.
Implications for practitioners and corporate groups
In-house counsel, directors and professional advisers should note the following:
- the market conduct Rule and Statement of Guidance should be reviewed in full to understand the standards now articulated by the Authority for the VASP sector;
- internal policies, procedures and disclosure materials should be assessed for alignment with the updated expectations and any repeals reflected in the Handbook;
- reporting and compliance frameworks may need to be updated to reflect the consolidated approach to market conduct and the Authority's guidance on compliance assessment.
The Cayman Islands Monetary Authority has published the market conduct Rule, the Statement of Guidance and an updated index of VASP regulatory measures on its website here.
Originally published 5 February 2026.
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.
