The Cayman Islands Securities Investment Business Law (2019 Revision) (the “SIB Law”) has been amended by the Securities Investment Business (Amendment) Law, 2019 (the “Amendment Law”) to, amongst other things, require certain “excluded persons” who currently benefit from an exemption from the requirement to be licensed under the SIB Law to re-register and become regulated under the SIB Law (as amended). “Excluded persons” subject to these new registration requirements that are relevant entities under the International Tax Co-operation (Economic Substance) Law, 2018 (the “ES Law”) must consider the potential application of the economic substance test set out in the ES Law (the “ES Test”).
In addition, such excluded persons who are currently registered with the Cayman Islands Monetary Authority (“CIMA”) must complete CIMA’s AML/ CFT reporting forms by 15 August 2019.
The Cayman Islands Government adopted the Amendment Law in response to international developments as to the appropriate regulatory overview of persons engaged in securities investment business. Schedule 4 of the SIB Law contained a list of “excluded persons” that did not require a licence to conduct securities investment business. Certain of those excluded persons listed at paragraphs 1, 4 and 5 of Schedule 4 were required to register with CIMA, make annual filings and pay an annual fee. The other excluded persons listed in paragraphs 2, 3 and 6 of Schedule 4 were non-registrable.
The Amendment Law substantially amends the requirements of the SIB Law for registration by certain former “excluded persons” and CIMA’s regulatory powers in respect of such persons, who are now required to become SIB Law registrants and for new registrants. Schedule 4 as amended (“Persons required to be registered under Section 5(4)” rather than “Excluded persons”) now only lists the categories of registrable persons formerly listed in paragraphs 1, 4 and 5 (“Registered Persons”).
According to a CIMA notice dated 19 June 2019 re-registration is subject to the applicant:
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Important Cayman Islands Securities Investment Business Law Changes