In order to comply with the Caribbean Financial Action Task Force’s (CFATF’s) proposals for harsher AML (anti-money laundering) legislation, the Cayman Islands government has announced that a further five Bills are to be presented to the legislative assembly by next month (Feb 21st 2020).
The deadline was set for the Cayman Islands to prove its efforts that they have been making positive and tangible progress to implement the CFATF’s 63 recommendations, which were detailed in its Cayman Islands Mutual Evaluation 2019 report.
The most significant changes are as follows as per the Mutual Funds (Amendment) Bill 2020 & the Private Funds Bill 2020:
The recording of beneficial ownership in a register.
The reporting of BO data to regulatory bodies.
Previously exempted investment funds (such as section 4(4) funds) must be auted and registered with the Cayman Islands Monetary Authority (CIMA).
Refine the definition of beneficial owner and corporate service provider obligations.
The draft Bills will be introduced by Financial Services Minister Tara Rivers this week, who will announce how the government plan to deal with changes to the supervision of open-ended and closed-ended funds and address the issue of beneficial ownership.
The Cayman Mutual Funds (Amendment) Bill 2020
The mutual funds Bill will affect Cayman Companies with funds with 15 or fewer investors capable of appointing or removing the operators and Section 4(4) funds, which have not previously fallen under the existing mutual funds legislation.
The Cayman Private Funds Bill 2020
The private funds Bill will also require private funds to be audited annually by a local CIMA-approved auditor in accordance with international standards. They will have to have appropriate and consistent internal procedures for the proper valuation and identification of their assets, and have proper custodial and cash-monitoring processes.
The Bill will apply to private funds set up as Cayman Islands partnerships, companies, unit trusts and limited liability companies, unless specifically exempted. It will also apply to non-Cayman Islands private funds that make an ‘invitation to the public in the Islands’.
The other three Bills that will also be presented are as follows:
The Companies (Amendment) Bill 2020.
The Limited Liability Companies (Amendment) Bill 2020.
The Limited Liability Partnership (Amendment) Bill 2020.