The Cayman Islands Monetary Authority
The Cayman Islands Monetary Authority (CIMA) is the main agency responsible for the regulation of the Cayman Islands financial industry. Established in 1997, CIMA is the product of a merger between the Financial Services Supervision Division, a government department responsible for financial regulation, and the Currency Board, a Statutory Board, which was responsible exclusively for currency matters.
CIMA is operationally independent from the Cayman Islands Government while being answerable to the Government and the Legislative Assembly for the conduct of its affairs.
CIMA's supervisory responsibility is to regulate licensees pursuant to the regulatory laws and the monitor their compliance with the money laundering regulations. In addition the CIMA's Board of Directors is also responsible for the licensing and registration of all Cayman Islands regulated entities as well as ongoing enforcement matters.
CIMA's mission statement is:
- To preserve the value and integrity of the Cayman Islands currency;
- To regulate the financial services industry and to assist overseas regulators in a manner which meets internationally applied standard appropriate to the Cayman Islands and which enhances market confidence and the reputation of the Cayman Islands;
- To foster sound, honest, competitive and innovative financial services and markets; and
- To act in the best economic interests of the Cayman Islands and in a fair, open, efficient and cost-effective manner.
CIMA regulates all financial service providers in the Cayman Islands which include the following:
- Banks & Trusts
- Mutual funds
- Insurance companies
- Money services businesses
- Corporate services providers
CIMA carries out the above responsibility via four main supervisory divisions being banking, fiduciary services (which covers trust companies and corporate services providers), insurance (both retail and captive) and the investment services division which covers the mutual funds sector.
In addition to its supervisory role, the CIMA's functions are supported by 6 non supervisory departments being Policy and Development, Legal, Compliance, Operations and Information Systems, Currency, and the Managing Director's Office. CIMA is also governed by a ten member board of Directors which includes the Managing Director.
In addition to its supervisory functions, CIMA is also responsible for the issuance and redemption of currency, and the management of the Currency Reserve on behalf of the Government and by extension the people of the Cayman Islands.
General supervisory approach
CIMA's approach is to maintain a financial centre with a supervisory system that reflects international supervisory standards articulated by the Basle Committee on Banking Supervision, the IAIS principles for insurance regulation, the IOSCO principles for regulation of investments business, the FATF Forty Recommendations on anti money laundering and best practices in the area of trust and corporate services regulation.
Ongoing supervision is carried out through a system of off-site and on-site functions. The off-site unit analysis of regulated entities uses periodic prudential returns, annual audited financial statements and regular meetings to asses the ongoing compliance of institutions.
On-site inspections entail a visit by a team of regulators from the respective department (e.g. banking). These inspections are carried out periodically and provide additional insight to the CIMA team into the risk management practices and operations of its licensees. This approach uses a system of interviews and sample testing of internal records and files to determine the institution's level of compliance with the regulatory laws. In cases where a licensee engages in conduct detrimental to the public interest or threatens the safety of the institution's clients, the legislation provides remedial powers. These may include revoking or imposing conditions on the licence, and changing management and directors.
As a part of its supervisory functions CIMA is also responsible for international cooperation with other regulatory bodies, namely to assist overseas regulatory authorities in accordance with the Monetary Authority Law (2003 Revision).
CIMA participates regularly in international regulatory forums including the Basle Committee Cross Border Working Group, Offshore Group of Insurance Supervisors and the Caribbean Financial Action Task Force (CFATF).
Cayman Islands Monetary Authority P.O. Box 10052 APO, Grand Cayman, Cayman Islands
Source: Offshore Library & CIFSA caymanfinances.com