{{ languageVal }}
  • English
  • French (Canada)
 

Industry Updates

CIMA Administrative Fines for Regulatory Laws Regulations and Rules

13 Jul 2020

On 26 June 2020, the Cayman Islands Monetary Authority ("CIMA") enacted the Monetary Authority (Administrative Fines) (Amendment) Regulations, 2020.  These regulations amend the Monetary Authority (Administrative Fines) Regulations (2019 Revision) and are referred to as the "Fines Regulations".

The Fines Regulations extend the application of the fines administered by CIMA from the anti-money laundering regime to all regulatory laws and regulations, and any rules issued by CIMA pursuant to those laws and regulations.  

By way of reminder, the Monetary Authority Law gives CIMA the power to impose administrative fines under the Fines Regulations for breaches committed by persons (entities and individuals), under the following laws (and associated regulations and rules):

 

  1. Anti-Money Laundering Regulations (2020 Revision)

  2. Banks and Trust Companies Law (2020 Revision)

  3. Companies Management Law (2018 Revision) (as amended)

  4. Directors Registration and Licensing Law, 2014 (as amended)

  5. Insurance Law, 2010 (as amended)

  6. Money Services Law (2020 Revision)

  7. Mutual Funds Law (2020 Revision)

  8. Private Funds Law, 2020

  9. Securities Investment Business Law (2020 Revision)

Breaches are categorised as being 'minor', 'serious' or 'very serious'.  The Fines Regulations prescribe the process for provision of a breach notice to a relevant party.  There will be a 30 day opportunity to reply to the breach notice and to rectify a 'minor' breach to CIMA's satisfaction.  If CIMA is not satisfied that a minor breach has been rectified, it is required to impose a fine.  For 'serious' or 'very serious' breaches, CIMA has the discretion whether to impose a fine, and in what amount, up to the cap for the relevant category.

 

There is a sliding scale of fines from CI$5,0001 for minor breaches to CI$100,000 for individuals and CI$1 million for entities for very serious breaches.  Fines for ongoing minor breaches

can be applied at intervals on a continuing basis, up to a CI$20,000 cap.

 

CIMA will have six months from becoming aware of a minor breach, or having received information from which the fact of the breach can be reasonably inferred, to impose a fine.  There is a two year time limit in respect of the imposition of fines for serious or very serious breaches.

 

Where a breach is a statutory offence, i.e. non-compliance under a Law, the imposition of a fine will not preclude prosecution for that offence (or be limited by the penalty for that offence), and likewise any prosecution will not preclude the imposition of administrative fines or penalties.

 

The Fines Regulations also provide for the procedures relating to the imposition of the fines and consequences, including:

 

  1. the criteria that CIMA must adopt when issuing breach notices, considering or reconsidering matters, if there is cause, and imposing discretionary fines;

  2. when a party may apply to the Management Committee of CIMA to review an original decision to issue a fine notice for a fixed fine; and

  3. when a party may apply to the Grand Court for leave to appeal against the original decision upon receipt of a fine notice for a discretionary fine.

The update to the Fines Regulations reinforces the need for all licensees and registrants, subject to the AML regime and laws noted above, to know and understand their obligations including (but not limited to):

 

  1. licensing and registration criteria, including filing deadlines;

  2. CIMA rules and notification obligations (e.g. updates or changes to business plans, directors and officers, legal or beneficial ownership, registered and principal offices, auditors, offering materials, and licensing or registration information); and

  3. maintaining appropriate systems and controls.

Our Regulatory & Compliance team can assist by providing regulatory calendars, monthly or annual updates, reporting matrices and training. 

Print Ready Version

For further information, please contact your Maples Group contact or one of the below contributors.



1 CI$1 is approximately US$1.25

Related Services

Corporate

Advising on the laws of the BVI, the Cayman Islands, Ireland, Jersey and Luxembourg, our global corporate team provides expert legal advice to corporate clients on all corporate commercial matters.  Our clients include major banks, multinationals and institutional investment firms, leading law and accountancy firms and a number of state / government entities across all industry sectors. 

Finance

Advising on the laws of the BVI, the Cayman Islands, Ireland, Jersey and Luxembourg, our global Finance team provides expert legal advice on even the most complex financial transactions under intense time pressure. Clients repeatedly return to our qualified finance lawyers to handle a variety of complex matters relating to acquisition and leveraged financing, asset finance, banking, debt capital markets, derivatives, fund finance, insurance linked products, Islamic finance, repackaging and structured finance. 

Insurance

Advising on the laws of the BVI, the Cayman Islands and Ireland, our global Insurance team of lawyers help to shape the insurance sector by providing expert legal advice on insurance vehicles, establishing insurance companies, insurance management and broker operations, catastrophe bond vehicles and other insurance-linked products, captive insurance, reinsurance and sidecars, licensing of insurers, managers and brokers and corporate advisory. 

Anti-Money Laundering Services

Increased regulatory focus and the implementation of aggressive international sanctions makes AML compliance more important then ever before. We bring unrivalled experience to offer a risk based, cost effective solution that can be tailored to individual requirements.

Banking

Advising on the laws of the BVI, the Cayman Islands, Ireland, Jersey and Luxembourg, our global Banking team of lawyers has extensive experience in advising banks and other financial institutions, private equity houses and corporates on many types of domestic and cross border banking transactions.  These comprise loan and other funding arrangements, including property financing, project finance and general corporate lending.

We advise both lenders and borrowers on counterparty issues as well as providing opinions covering due incorporation / establishment, capacity, authorisation, enforceability and enforcement of security interests. 

Funds & Investment Management

Advising on the laws of the BVI, the Cayman Islands, Ireland, Jersey and Luxembourg, our global Funds & Investment Management team provides expert legal advice on every aspect of the life cycle of an investment fund including set up, management and investment across a broad range of fund structures and management entities.