Cayman Islands to abolish regulatory exemption for single family offices

Under amendments made to SIBL in June 2019, most entities previously excluded from licensing were brought into the 'registered persons' regime, and regulated by the Cayman Islands Monetary Authority (CIMA) under Schedule 4 of SIBL.

SFOs, however, still came under SIBL's Schedule 2A exception, classifying them as 'non-registrable persons' exempt from CIMA's prudential oversight, although regulations under the Proceeds of Crime Law assign CIMA as the anti-money laundering compliance supervisor for SFOs.

However, the global Financial Action Task Force's (FATF’s) recommendations on anti-money laundering oversight of securities investment businesses have forced the Ministry to reconsider this exemption. Its discussions with CIMA and FATF, in addition to three consultations with industry, have led it to the view that CIMA must have powers to assess the fitness and propriety of SFOs and their members. This also required granting CIMA inspection powers to achieve effective supervision.

The Law will therefore be amended to remove the current Schedule 2A 'non-registrable person' exemption for SFOs, and in future CIMA will scrutinise the probity of SFOs that conduct securities investment business.

Sources

• Conyers
• Conyers (Cayman MFS, PDF)