2023 Changes to Corporate Governance for Cayman Regulated Entities: What You Need to Know
On 14 April 2023, the Cayman Islands Monetary Authority (“CIMA”) released a series of regulatory measures, effective 14 October 2023 (“Effective date”) which include the Rule[1] and Statement of Guidance[2] (“SOG”) – Internal Controls for Regulated Entities; Rule – Corporate Governance for Regulated Entities; and an updated Statement of Guidance on Corporate Governance – Mutual Funds and Private Funds (collectively, the “New Measures”).
The New Measures bring enhanced internal controls, corporate governance and board requirements for all types of regulated entities[3], and introduce clear guidance for mutual funds and private funds. This includes clarification that the board of directors or equivalent (“BOD”) of a regulated entity is ultimately responsible for ensuring an adequate and effective system of internal control is established, documented and maintained.
The New Measures require that the BOD meet at least once annually, and that such meeting should be fully minuted. Further they acknowledge that regulated entities often outsource their obligations under the Cayman Islands anti-money laundering laws and regulations (“Cayman AML Regulations”), including the appointment of an AML Compliance Officer (“AMLCO”), a Money Laundering Reporting Officer (“MLRO”) and Deputy MLRO (“DMLRO”). Under the New Measures, each of these roles is considered a material outsourced function, requiring the BOD to conduct adequate due diligence before making an appointment. Individuals must be suitably qualified, with relevant experience and adequate knowledge of Cayman AML Regulations and the wider financial services industry.
How Opus can help
CIMA acknowledges that regulated entities may rely on service providers, so long as the regulatory obligations are satisfactorily performed. Opus can provide:
Experienced individuals to perform AMLCO/MLRO/DMLRO roles.
An experienced team to perform AML procedures in accordance with Cayman law.
Comprehensive real time AML reporting through the Opus Portal.
To understand more how Opus can help, please contact a member of our sales team at sales@opusfundservices.com
[1] A Rule is a CIMA directive creating a regulatory obligation, the breach of which may lead to a fine or regulatory action
[2] SOG is a measure for CIMA to assess compliance with a Rule or applicable law.
[3] Regulated entities refer to all entities regulated by CIMA under the ‘regulatory acts’ as defined within the Monetary Authority Act (As Revised), and includes mutual funds and private funds.