Financial Services Ministry Presents Three Bills In Parliament – Finance and Banking


Cayman Islands:

Financial Services Ministry Presents Three Bills In Parliament


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In the latest meeting of Parliament, which started on 4 December
and is slated to end on 18 December, the Cayman Islands Government
considered legislative changes that will affect virtual asset
service providers, companies, and the requirements for witnessing
of documents.

The Virtual Asset (Service Providers) (Amendment) Bill,
2020
, Companies (Amendment) (No. 3) Bill, 2020, and
the Property (Miscellaneous Provisions) (Amendment)
Bill, 2020
were presented by the Minister of Financial
Services, the Hon. Tara Rivers.

The Virtual Asset Service Providers (VASP) Bill supports the
continuing implementation of our VASP regulatory framework by
allowing persons engaged in virtual asset services to continue
operating as the provisions of the Bill are commenced.

In Cayman, a virtual asset is defined as a digital
representation of value, such as cryptocurrency, that can be
electronically traded and invested. The VASPs legislation allows
CIMA to register, and also supervise, persons and entities who
provide virtual asset business services to other persons and/or
entities.

The Companies Bill is intended to address four matters.

  • It ensures companies conduct risk
    assessments on clients that are legal entities originating from
    jurisdictions previously listed by Government as having equivalent
    anti-money laundering and countering the financing of terrorism
    (AML/CFT) legislation as the Cayman Islands. This change, designed
    to strengthen AML/CFT measures within the financial services
    industry, matches the Proceeds of Crime Law (POCL) and Anti-Money
    Laundering Regulations (AMLR) amendments made this year. The POCL
    and AMLR changes shift the responsibility for conducting the risk
    assessments from Government (via the Anti-Money Laundering Steering
    Group) to the financial institutions who have clients from those
    jurisdictions.

  • It adds Cayman’s Customs and
    Border Control Services to the list of public bodies in the Islands
    that may request information from the Registrar of Companies (RoC)
    for the purposes of AML/CFT (anti-money laundering and countering
    the financing of terrorism). This will better allow the CBC to
    fulfil their responsibilities for combatting AML/CFT.

  • It will now require all company types
    to annually file their nature of business. Currently, some company
    types are not required to do so.

  • It takes away the penalty for failing
    to comply with the RoC’s requests for additional information as
    the penalty is now redundant. The RoC can instead deal with
    noncompliance by issuing an administrative fine. These fines
    support Cayman’s beneficial ownership regime by ensuring the
    financial services industry submits and maintains current
    beneficial ownership information.

The Property Bill aims to address the requirement of physical
presence for witnessing documents where it has become more
difficult due to the COVID-19 pandemic. The Bill allows a person to
use online video technology to virtually witness the signature of
deeds and instruments under seal, to validate these documents.

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.

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