Introduction
The Securities Investment Business (Amendment) Law, 2019 (SIB Amendment) changed into published on 18 June 2019.
Overview
The SIB Amendment consists of some of the amendments to the Securities Investment Business Law (2019 Revision) (SIBL) in reaction to the Caribbean Financial Action Task Force’s evaluation of Cayman’s anti-money laundering framework and the Cayman Islands Monetary Authority’s (CIMA) evaluation of the Excluded Person regime beneath SIBL.
The amendments will affect persons who’re currently registered with CIMA as Excluded Persons below SIBL and broadens the scope of the regulatory and supervisory framework for people engaging in the securities investment business.
Background – SIBL and the Excluded Persons Regime
SIBL regulates the behavior of sure securities investment sports, inclusive of dealing in, arranging deals in, coping with or advising on, securities in or from in the Cayman Islands. SIBL applies to Cayman Islands companies and partnerships, and overseas companies registered inside the Cayman Islands, which have interaction in “securities investment enterprise” in or from inside the Cayman Islands.
Prior to the SIB Amendment, if SIBL carried out to an entity and its sports, then that entity became required to both:
follow to CIMA for a full licence beneath SIBL; or
register as an “Excluded Person” if the entity fell inside sure exemptions from the requirement to maintain a licence (the big majority of entities conducting securities funding business in or from within the Cayman Islands have been registered as Excluded Persons in preference to obtaining a complete licence).
The following classes of men and women had been approved to sign in as an Excluded Person, rather than apply for a complete licence:
a group organization that includes on securities funding business completely for one or more groups inside the same organization;
someone who contains on securities investment enterprise exclusively for stylish people (i.E. A listed or regulated entity, or an skilled investor that invests more than US$a hundred,000 consistent with transaction), excessive internet really worth folks (i.E. An individual with a net worth of at the least US$a million or a felony individual with overall belongings of at the least US$5,000,000) or entities whose buyers are both sophisticated humans or high net worth men and women; or
a enterprise regulated with the aid of a recognized regulatory authority in the country wherein the securities funding commercial enterprise is being performed.
Entities coping with or advising funding budget could generally fall inside 1.-3. Above.
Excluded Persons were required to make an annual exemption submitting and pay an annual price to CIMA (presently US$6,098). No different filings were required of Excluded Persons beneath SIBL.
Impact of the SIB Amendment
As a end result of the SIB Amendment:
Excluded Persons are required to provide CIMA with sure anti-cash laundering/counter terrorism information by using 15 August 2019 by using completing bureaucracy AIR-157-75 and ARC-158-seventy five (Campbells have prepared editable variations of those paperwork and sent them to registered office customers);
Excluded Persons now are referred to as “Registered Persons” for the purposes of SIBL;
modern-day Excluded Persons will need to re-register as Registered Persons by way of 15 January 2020. The registration necessities require CIMA to be satisfied that the applicant’s shareholders, directors and senior officials are healthy and proper folks which may also require the availability of private questionnaires and other files for such people. No steering has been issued yet but Campbells will offer an replace in due direction;
Registered Persons will need to file an annual statement by using 15 January each 12 months taking off 2020;
a Registered Person will also be required to:
notify CIMA within twenty-one days of ceasing to hold on securities investment business;
notify CIMA inside twenty-one days of any material alternate within the facts filed through it in its utility or annual statement;
notify CIMA of any problem of shares (if a company) or hobbies (if a partnership) and, where issued, any voluntary disposal of such stocks or pastimes (consisting of a useful interest therein) inside twenty-one days of the transfer or disposal;
notify CIMA of any changes in senior officers of a Registered Person inside twenty-one days of the switch or disposal;
alternate its call if CIMA considers it probably to deceive or misinform or if it consists of any prescribed word or expression; and
one after the other account for the funds and assets of every customer and that of the
