Cayman removed from UK and EU AML lists
Following the removal of the Cayman Islands from the Financial Action Task Force’s ‘greylist’ last year, both UK and the EU have removed the Cayman Islands from their respective lists of “high-risk third countries”.
The removal from the UK’s list took effect on 8 January 2024 and from the EU’s list took effect from 7 February 2024.
The Economic Secretary to the UK Treasury noted that that the Cayman Islands has made significant progress to reform its AML / CFT regime and strengthen its anti-money laundering defences and competent authorities.
Similarly, the EU recognised that the Cayman Islands has strengthened the effectiveness of its AML / CFT regime, having addressed all the recommended points set out in the FATF’s action plan for the jurisdiction.
More on this story can be found here.
Consultation on ELP Amendment Act
The Ministry of Financial Services has circulated a consultation to industry on a proposed Exempted Limited Partnership (Amendment) Bill, 2024 intended to enhance the Exempted Limited Partnership Act (Revised). It says its aim is to ensure the ELP Act continues to function for the benefit of legal practitioners and their clients alike.
The main proposals include the introduction of provisions to permit an exempted company or LLC to convert to an ELP and an extension of the provisions of the Companies Act to permit a voluntary liquidation of the ELP to be brought under supervision of the Grand Court of the Cayman Islands.
Companies (Amendment) Act, 2024
The Companies (Amendment) Act, 2024 has been approved by the Cayman Islands legislature and, when brought into force, will introduce increased flexibility to certain provisions of the Companies Act.
The key changes under the CA Amendment Act will permit a number of things currently not permissible under the Companies Act. These include: a reduction of share capital without the need for Court approval; the re-registration of a Cayman Islands exempted company as an ordinary resident company; and the conversion of a Cayman Islands LLC or Cayman Islands foundation company to an exempted company.
Proceeds of Crime Act amendments
Certain provisions of the Proceeds of Crime (Amendment) Act, 2023, (POCA Amendment Act) came into force on 31 January 2024. These provisions relate to reforms in the areas of intelligence gathering and investigation and ensure that the Proceeds of Crime Act (Revised) (POCA) conforms to international best practices.
CIMA Rule and Statement of Guidance in full force
Another key update is that the Cayman Islands Monetary Authority’s (CIMA) Rule and Statement of Guidance on the Nature, Accessibility, and Retention of Records for Licensees Conducting the Business of Company Management is now in full effect.
The Rule and Statement of Guidance (Rule and SOG) came into effect immediately upon publication in August 2023 for new licensees. For existing licensees, it came into effect on 1 April, 2024. The Rule and SOG does not extend to regulated mutual funds and private funds.
It applies to companies operating under the Companies Management Act, the Banks and Trusts Companies Act, the Mutual Funds Act, and the Insurance Act.
The full rule and statement of guidance can be found here.