Financial Crime World

Cayman Islands Monetary Authority (CIMA) Enhances Regulatory Framework

Strengthening Financial Services Industry in the Cayman Islands

The Cayman Islands Monetary Authority (CIMA) has been actively working to enhance its regulatory framework to ensure the continued success of the financial services industry. Here are some key initiatives implemented by CIMA:

Ensuring AIFMD Compliance

  • MOUs with 27 EU Countries: CIMA has entered into Memoranda of Understanding (MOUs) with 27 European Union countries to facilitate the marketing of Cayman-domiciled funds in the EU under the Alternative Investment Fund Managers Directive (AIFMD).
  • Regulatory Framework Review: The authority is reviewing its current regulatory framework to determine whether it is suitable for the potential extension of the passport regime to third countries, including the Cayman Islands.

Enhancing Regulatory Framework and Oversight

  • Working Group Established: A working group has been established to examine how the regulatory framework for funds and fund managers can be adapted to meet the needs of funds that would like to market their units in the European Union under a potential passporting regime.
  • Surveys Conducted: CIMA conducted two surveys to gather feedback from the financial services industry on matters related to AIFMD, including delegation provisions and depositaries.

Improving Efficiency and Effectiveness

  • Onsite Inspection Unit Established: CIMA established a dedicated Onsite Inspection Unit to focus on high-risk entities and develop best practices and standards for onsite inspections across all regulatory divisions.
  • Regulatory Enhanced Electronic Forms Submission (REEFS): The authority launched an online portal that enables registered companies and licensees to submit applications and make change requests electronically.

National Risk Assessment

CIMA is actively participating in the National Risk Assessment (NRA) being conducted for the Cayman Islands. The NRA aims to identify deficiencies in how the jurisdiction identifies, assesses, and understands money laundering and terrorist financing risks.