Regulatory fees to increase
The Ministry of Financial Services has confirmed that it has competed a consultation process with industry, and, once approved by Cabinet, proposed revisions to General Registry service fees will come into effect on 1 January 2025.
These will include increases to the Cayman Islands Monetary Authority’s regulatory fees, which, it notes, have remained largely unchanged over the last decade.
The proposed increases to both the regulatory and service fees are in line with the Hon. Premier’s 2024-2025 Budget Policy Statement in December 2023, which referred to enhanced revenue streams to achieve broader economic and budgetary objectives.
Fund registrations reach 30k milestone
The Cayman Islands has reached a financial milestone: a record 30,000 funds are now registered here.
According to the Cayman Islands Monetary Authority, there were 30,038 registered investment funds in Cayman as of September 4. These comprised 17,080 private funds and 12,958 mutual funds.
CIMA Managing Director Cindy Scotland said the milestone was the result of its robust regulatory framework. “This accomplishment underscores the strength and resilience of our regulatory framework, which continues to inspire confidence from the international funds industry,” she said.
“It is a clear indication that the Cayman Islands remains the funds centre of choice for fund managers worldwide, reflecting our commitment to maintaining the highest standards of excellence and integrity.”
New Beneficial Ownership Transparency rules
On July 31, The Beneficial Ownership Transparency Act, 2023 and the Beneficial Ownership Transparency Regulations, 2024 came into effect in the Cayman Islands. Previously spread across multiple pieces of legislation, these are designed to consolidate the beneficial ownership requirements into a single statute.
But they also bring in some new rules to be aware of – and some tight deadlines. All entities falling within scope of the new regulations will need to comply before enforcement occurs at the beginning of 2025.
There are also some key changes.
The Act introduces the concept of a “legal person” which will now include entities that were previously exempt. Some of these include limited partnerships, exempted limited partnerships and foundation companies. The Act does still exclude foreign companies registered in the Cayman Islands under the Companies Act (as revised).
The changes still allow for what is known as alternative routes to compliance – defined legal persons able to take advantage of this alternative route to compliance in order to meet the requirements. These include a registered fund, under either the Private Funds Act (as revised) or the Mutual Funds Act (as revised). In most cases, these funds will be allowed to submit the contact details of a licensed fund administrator or another contact person licensed or registered within the Cayman Islands, which in many cases will most likely be the funds corporate service provider.
Thirdly, the definition of beneficial owner in relation to a legal person has been expanded to bring it more in line with the Cayman Islands Anti-Money Laundering Regulations (as revised). The definition of a beneficial owner now refers to an individual: who ultimately owns or controls (directly or indirectly) 25% per cent or more of the shares, voting rights or partnership interests in the legal person; who otherwise exercises ultimate effective control over the management of the legal person; or who is identified as exercising control of the legal person through other means.
One of the biggest questions many will have will be around the accessibility of the data. The Act itself does not provide for public access – but it does provide for the possibility of public access to certain required particulars later. Individuals seeking such information would need to meet a “legitimate interest test” and would typically be the preserve of those legitimately seeking information to prevent or combat money laundering and terrorist financing.