the Securities Investment Business (Amendment) Law, 2019 (SIB Amendment) changed into published on 18 June 2019.
The SIB Amendment consists of several amendments to the Securities Investment Business Law (2019 Revision) (SIBL) in reaction to the Caribbean Financial Action Task Force’s assessment of Cayman’s anti-money laundering framework and the Cayman Islands Monetary Authority’s (CIMA) assessment of the Excluded Person regime underneath SIBL.
The amendments will affect men and women who’re presently registered with CIMA as Excluded Persons underneath SIBL and broadens the scope of the regulatory and supervisory framework for humans accomplishing securities funding business.
Background – SIBL and the Excluded Persons Regime
SIBL regulates the behavior of positive securities funding activities, including dealing in, arranging offers in, dealing with or advising on, securities in or from in the Cayman Islands. SIBL applies to Cayman Islands corporations and partnerships, and overseas corporations registered within the Cayman Islands which interact in “securities investment commercial enterprise” in or from in the Cayman Islands.
Before the SIB Amendment, if SIBL implemented to an entity and its activities, then that entity changed into required to both:
practice to CIMA for a full license underneath SIBL; or
register as an “Excluded Person” if the entity fell inside certain exemptions from the requirement to maintain a licence (the sizable majority of entities accomplishing securities funding business in or from within the Cayman Islands had been registered as Excluded Persons in place of obtaining a complete licence).
The following classes of men and women have been approved to sign up as an Excluded Person, rather than apply for a complete licence:
a set organisation that incorporates on securities funding enterprise exclusively for one or more agencies within the equal group;
a person who contains on securities investment business exclusively for stylish people (i.E. A indexed or regulated entity, or an experienced investor that invests greater than US$100,000 per transaction), excessive internet really worth humans (i.E. An man or woman with a net worth of at least US$a million or a criminal person with overall property of as a minimum US$5,000,000) or entities whose traders are both state-of-the-art folks or excessive internet worth folks; or
a enterprise regulated with the aid of a known regulatory authority in the united states in which the securities investment business is being performed.
Entities dealing with or advising investment funds might commonly fall inside 1.-three. Above.
Excluded Persons were required to make an annual exemption filing and pay an annual rate to CIMA (currently US$6,098). No different filings had been required of Excluded Persons beneath SIBL.
Impact of the SIB Amendment
As a end result of the SIB Amendment:
Excluded Persons are required to offer CIMA with sure anti-money laundering/counter-terrorism information by means of 15 August 2019 by means of finishing bureaucracy AIR-157-seventy five and ARC-158-seventy five (Campbells have organized editable versions of those forms and despatched them to registered workplace customers);
Excluded Persons now are called “Registered Persons” for the purposes of SIBL;
present-day Excluded Persons will want to re-sign in as Registered Persons via 15 January 2020. The registration requirements require CIMA to be glad that the applicant’s shareholders, administrators and senior officers are match and proper persons which can also require the provision of private questionnaires and different documents for such men and women. No steerage has been issued but however Campbells will offer an update in due direction;
Registered Persons will want to document an annual assertion by means of 15 January each yr setting out 2020;
a Registered Person will also be required to:
notify CIMA inside twenty-one days of ceasing to carry on securities funding commercial enterprise;
notify CIMA inside twenty-one days of any material exchange inside the facts filed by it in its utility or annual statement;
notify CIMA of any trouble of stocks (if a enterprise) or interests (if a partnership) and, in which issued, any voluntary disposal of such shares or interests (consisting of a useful interest therein) inside twenty-one days of the transfer or disposal;
notify CIMA of any changes in senior officials of a Registered Person inside twenty-one days of the switch or disposal;
trade its call if CIMA considers it likely to lie to or deceive or if it consists of any prescribed word or expression; and
one after the other account for the finances and belongings of each consumer and that of the Registered Person.
Governance necessities had been added including the requirement to have the right range of administrators, companions or managers (because the case can be) appointed. This calls for all Registered Persons which are groups to have as a minimum people as directors or one corporate director, all Registered Persons which might be confined liability agencies to have at the least managers and all Registered Persons which can be exempted restrained partnerships to have as a minimum two directors (or equal officials) of the overall accomplice or, wherein a trendy partner is another exempted constrained partnership, of the ultimate standard partner;