The Securities Investment Business (Amendment) Law, 2019 (SIB Amendment) become published on 18 June 2019.
The SIB Amendment includes several amendments to the Securities Investment Business Law (2019 Revision) (SIBL) in response to the Caribbean Financial Action Task Force’s assessment of Cayman’s anti-cash laundering framework and the Cayman Islands Monetary Authority’s (CIMA) evaluation of the Excluded Person regime underneath SIBL.
The amendments will affect men and women who are currently registered with CIMA as Excluded Persons below SIBL and broadens the scope of the regulatory and supervisory framework for persons accomplishing securities investment commercial enterprise.
Background – SIBL and the Excluded Persons Regime
SIBL regulates the behavior of certain securities funding activities, which include dealing in, arranging deals in, dealing with or advising on, securities in or from inside the Cayman Islands. SIBL applies to Cayman Islands organizations and partnerships, and foreign businesses registered within the Cayman Islands which have interaction in “securities investment commercial enterprise” in or from in the Cayman Islands.
Before the SIB Amendment, if SIBL carried out to an entity and its activities, then that entity becomes required to either:
apply to CIMA for a complete license under SIBL; or
sign up as an “Excluded Person” if the entity fell within certain exemptions from the requirement to preserve a license (the sizable majority of entities engaging in securities funding commercial enterprise in or from inside the Cayman Islands had been registered as Excluded Persons instead of obtaining a full license).
The following classes of persons have been authorized to check in as an Excluded Person, as opposed to practice for a full license:
a group organization that carries on securities investment enterprise solely for one or extra groups in the equal organization;
a person who carries on securities investment enterprise completely for stylish persons (i.E. A indexed or regulated entity, or an skilled investor that invests more than US$one hundred,000 in keeping with transaction), excessive internet well worth men and women (i.E. An person with a net well worth of at the least US$1,000,000 or a criminal man or woman with total assets of at least US$5,000,000) or entities whose buyers are both sophisticated individuals or high internet really worth persons; or
an enterprise regulated by a recognized regulatory authority within the united states in which the securities investment business is being carried out.
Entities managing or advising an investment budget would generally fall inside 1.-3. Above.
Excluded Persons had been required to make an annual exemption filing and pay an annual price to CIMA (currently US$6,098). No other filings were required of Excluded Persons beneath SIBL.
Impact of the SIB Amendment
As a result of the SIB Amendment:
Excluded Persons are required to provide CIMA with sure anti-money laundering/counter-terrorism information through 15 August 2019 with the aid of completing forms AIR-157-seventy five and ARC-158-seventy five (Campbells have organized editable versions of that bureaucracy and despatched them to registered office clients);
Excluded Persons now are referred to as “Registered Persons” for the functions of SIBL;
Contemporary Excluded Persons will want to re-sign up as Registered Persons using 15 January 2020. The registration necessities require CIMA to be satisfied that the applicant’s shareholders, administrators, and senior officials are matches and right men and women which may additionally require the availability of personal questionnaires and other documents for such people. No steering has been issued yet however Campbells will provide a replace in due route;
Registered Persons will need to file an annual assertion through 15 January every 12 months taking off 2020;
a Registered Person may also be required to:
notify CIMA within twenty-one days of ceasing to carry on securities investment enterprise;
notify CIMA within twenty-one days of any material exchange within the statistics filed by it in its application or annual assertion;
notify CIMA of any difficulty of stocks (if an enterprise) or pursuits (if a partnership) and, wherein issued, any voluntary disposal of such stocks or pursuits (such as a useful interest therein) inside twenty-one days of the transfer or disposal;
notify CIMA of any adjustments 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 misinform or mislead or if it includes any prescribed word or expression; and
one after the other account for the price range and property of every patron and that of the Registered Person.