The Cayman Islands Monetary Authority ("CIMA") has issued the second edition of its Supervisory Issues and Information Circular (the "Circular"). The Circular is intended to raise awareness of common regulatory and thematic issues identified by CIMA and to highlight important regulatory developments for the financial sector. The issues dealt with in this edition of the Circular are:
Payment of Annual Fees
Licensees are reminded that annual fees will be payable and that CIMA will be issuing fee reminder notices in early course.
Requirement/Timelines for License Applications
It is noted that the timelines associated with license applications and cancellations, changes in ultimate beneficial ownership, etc have been reviewed and revised. It is further noted that CIMA will not commence its formal processing of any application until a complete package, inclusive of due diligence documentation, has been received.
Terminations of Mutual Funds
The Circular outlines the procedure involved in terminating the registration of a fund or the cancelation of its license with CIMA.
Resignation and Surrender of Registered/Licensed/Corporate- Directors
Directors are reminded of the proper procedures with regard to resignation from a covered entity and/or surrendering the director's registration or license in accordance with the Director's Registration and Licensing Law, 2014. For more information on this procedure, please see our briefing: Supervisory Info Circular October 2016
Regulatory Enhanced Electronic Forms Submissions (REEFS) and Fund Annual Return Form (FAR) Updates
CIMA's Regulatory Enhanced Electronic Form Submission system project ("REEFS") aims to provide enhanced online access for submission of new license applications, various change applications by licensees, and financial, prudential and statistical returns. It is noted in the Circular that further improvements are expected within the system thereby enabling CIMA to better monitor submissions and ensuring improved customer experience and supervisory efficiency. Confirmation of an update to the Fund Annual Return ("FAR") Form is also noted.
Basel II & III; International Regulatory Framework for Banks
Shortfalls with regard to stress testing by banks was noted by CIMA in the Circular and licensees are advised that further guidance on both stress testing and liquidity ratios in order to comply with Basel II & III will be issued in the coming months.
Regulatory Issues-Disclosures by Insurers
During the course of the year, CIMA, in carrying out its supervisory work, has noted a few regulatory issues which it feels contributed to licensees compromising the quality of service provided to customers, as well as compliance and supervisory breakdowns. The Circular discusses the degree of non compliance with the Rule and Statement of Guidance on Market Conduct for Class A Insurers, Agents and Brokers.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
