Cayman Islands exempts registered persons from company beneficial ownership rules

Monday, 29 June 2020
From 29 June, Cayman Island companies classed as ‘registered persons’ will be exempted from the beneficial ownership reporting obligations imposed by the Companies Law or the Limited Liability Companies Law.

Registered persons include the nearly 3,000 financial institutions previously known as ‘excluded persons’ under the Cayman Islands’ Securities Investment Business Law (SIBL) and which were allowed to offer securities investment services to sophisticated and high-net-worth individuals without obtaining a licence. The category of SIBL excluded persons was abolished earlier this year, in accordance with recommendations made by the Caribbean Financial Action Task Force (CFATF) mutual evaluation report of March 2019.

Although a registered person’s obligation to comply with Companies Law or Limited Liability Companies Law beneficial ownership rules has ended, they now have some new ongoing obligations under the Securities Investment Business Law.

They must have at least one corporate director or two directors/ managers/partners (whichever is applicable), that are fit and proper persons. They must also notify their ownership and control structure to the Cayman Islands Monetary Authority (CIMA), along with any changes to their senior officers or direct or indirect ownership, within 21 days of the change. They are also obliged to segregate their client funds from their own funds and separately account for both.

Moreover, CIMA now has substantial enforcement powers to ensure effective regulatory oversight of registered persons.


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