THE
Podcast
REGULATORY 15/15
January 2025
Content
• Beneficial Ownership Update
• Virtual Asset Service Providers (VASP) Update
• Cayman Islands Monetary Authority (CIMA) Update
• Financial Reporting Authority (FRA) Update
• Regulatory Deadlines Reminder
Introduction
Introduction to the 15/15
• A 15-minute summary of the latest developments in the regulatory laws of the Cayman Islands released on the 15th day of every month
• A copy of the previous 15/15 released on 15 December can be accessed on our website: Maples 15/15
• Comments and suggestions to format of the 15/15 are always welcome –please email speakers directly
Beneficial Ownership Update
Beneficial Ownership Update
• Beneficial Ownership Transparency (Legitimate Interest Access)
Regulations commence on 28 February 2025
• allow legitimate-interest access to beneficial ownership information in the Cayman Islands in matters concerning a specific legal person including where there is evidence that the legal person is linked to money laundering and its predicate offences or terrorist financing
• Beneficial Ownership (Access Restriction) Regulations, 2024 commenced on 9 December 2024
• set out the framework for beneficial owners to apply for protection from public disclosure if they believe that disclosing their association with the legal person will place them or an individual living with them at serious risk of kidnapping, extortion, violence, intimidation or other similar danger or serious harm
Beneficial Ownership (cont'd)
• 17 December 2024 - Cayman Islands Government (CIG) also published new Guidance on legitimate interest access and access restriction to assist with interpretation of the requirements under the Beneficial Ownership Transparency Act, 2023 ("BOTA") and the foregoing Regulations
• 23 December 2024 - International Tax Co-operation (Economic Substance) (Amendment of Schedule) Regulations, 2024 published in the Cayman Islands Gazette
• repeal the existing definition of 'ultimate beneficial owner' and incorporate the definition of 'beneficial owner' in section 4 of the BOTA
• 27 December 2024 - Beneficial Ownership Transparency (Amendment) Bill, 2024 published in the Cayman Islands Gazette
Beneficial Ownership (cont'd)
• This Bill makes certain clarifying changes to the BOTA, including:
• amending the definition of beneficial owner for circumstances when the trustee of a trust will be identified as a contact person in respect of a legal person
• requiring the identification of a senior managing official of a trust where no registrable beneficial owner or trustee can be identified
• non-profit organisations in the list of out-of-scope companies
• clarifying information to be included in written confirmations in relation to certain legal persons and the information that corporate service providers (CSPs) must maintain in relation to legal persons that have engaged them
• granting Customs and Border Control Service (and certain others) access to the search platform and exempting information access from the Freedom of Information Act (As Revised)
VASP Update
VASP Update
• On 24 December 2024, the Ministry of Financial Services & Commerce released a limited scope consultation with respect to the amendment of a definition in the Virtual Asset (Service Providers) Act (As Revised)
• Aimed at ensuring the appropriate treatment of tokenised equity and / or investment interests
• The draft consultation Bill seeks to amend the definition of 'issuance of a virtual asset' or 'virtual asset issuance'
• Seeks to clarify that equity interests issued by entities regulated under the Mutual Funds Act (As Revised) and the Securities Investment Business Act (As Revised) or investment interests issued under the Private Funds Act (As Revised) do NOT fall within the above definition
• This consultation closed on 3 January 2025
• Short time frame to allow the Ministry to publish the Bill in time for the next meeting of Parliament in January
CIMA Update
CIMA Update
• 10 December 2024 - CIMA published a new FAQ which in effect provides an extension of up to six months for the holding of an annual operator meeting for a registered investment fund
• Rule - Corporate Governance for Regulated Entities specifies that the 'Governing Body' of a regulated entity (including registered investment funds) must hold regular meetings, at least annually
• new FAQ contemplates the number of operator meetings reflected in a Fund Annual Return ("FAR ") form is not necessarily restricted to meetings held within the relevant financial reporting period
• Meetings to address matters arising during the reporting period may be held after the FYE up until the date of filing the FAR and be included in the FAR
• FAQ prohibits double counting though, such that each meeting can only be counted once
FRA Update
FRA Update
• 2 January 2025 – sections 11, 12 and 13 of the Proceeds of Crime (Amendment) Act, 2023 came into force
• Amendments to sections 133,134 and 135 of the Proceeds of Crime Act (As Revised) (POCA) that now require those filing a suspicious activity report (SAR) to have the consent of the FRA to 'commit the act'
• The FRA had anticipated extending the commencement date for the DAML / Consent Regime to later in 2025 for consultation
• Draft Regulations for industry consultation will be issued soon
• In the interim, the FRA has released guidance on how the DAML / Consent Regime will operate in their industry advisory published on 10 January 2025
FRA Update (cont'd)
• Overview of FRA Guidance
• 1. Submit a DAML / Consent Request
• Information required by sections 136 or 137 of POCA
• Submit through AMLive portal or by secure email to FinancialReportingAuthority@gov.ky
• 2. Authority for Consent – Director of the FRA
• 3. Notice Period and Deemed Consent – 7 working days commencing on first working day after request received
• 4. Refused Consent and Moratorium Period
• Moratorium Period of 30 calendar days
• During Moratorium Period, the activity that is the subject of the request should NOT be carried out or else risk ML offence
Regulatory Deadlines
Reminder
Deadlines Reminder
• CIMA-regulated entities are required to pay annual fees by 15 January
• In December 2024, CIG passed regulations increasing most CIMA fees effective for 2025 (as well as certain Registry fees)
• Regulated entities should be aware of these increases and liaise with their CSPs to ensure the correct fees are paid
• Registered and licensed directors must also pay registration/licensing annual fees by 15 January
• SIBA Registered Persons are required to file annual declarations by 15 January (in addition to paying annual fees by that same date)
• Registry fees, company annual returns and economic substance notifications (ESNs) are due by 31 January 2025
• If fees are unpaid on 1 February – entity is not in good standing
This presentation was presented on and is only accurate to 13 January 2025. The information within this presentation is provided for general guidance only, is not intended to be comprehensive and does not constitute legal advice or give rise to an attorney / client relationship.
Specialist legal advice should be taken in relation to specific circumstances. If you require legal advice, please reach out to your usual Maples and Calder contact.
Published by Maples and Calder (Cayman) LLP. January 2025
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