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Ministry brings key bills ahead of task force review

| 12/09/2016 | 0 Comments

(CNS Business): The financial services minister will be presenting another four bills at the forthcoming meeting of the Legislative Assembly in order to ensure Cayman successfully clears next year’s Caribbean Financial Action Task Force’s (CFATF) mutual evaluation process and improve the financial sector’s regulatory framework. The four pieces of legislation are intended to maintain Cayman’s adherence to international standards and will give greater powers for law enforcement and regulatory agencies to police the sector and cooperate with international counterparts.

Officials also said the draft bills, which will be debated when parliament meets in October, also provide greater clarity about the type of businesses that have a responsibility to adhere to the international standards.

The bills are: the Monetary Authority (Amendment) Bill, 2016 the Auditors Oversight (Amendment) Bill, 2016; the Companies Management (Amendment) Bill, 2016 and the Non-Profit Organisations Bill, 2016.

The Monetary Authority bill will allow the country’s financial service industry regulator, the Cayman Islands Monetary Authority (CIMA), to implement an administrative fines regime as a mechanism to ensure the industry’s compliance with laws and regulations that support the jurisdiction’s anti-money laundering regime and international standards.

The bill allows CIMA to develop the processes and regulations for the fines but Cabinet approval would be necessary for these regulations to take effect. Officials said the proposed law satisfies the FATF’s requirement that countries should have effective, proportionate and dissuasive sanctions regarding financial compliance.

The Auditors Oversight law will add two categories of audits: one for those who wish to ‘opt-in’ to be supervised by the AOA, and the other creates a new category to give the AOA the flexibility to expand its scope of supervision to other auditors, if warranted by further international regulatory changes. Currently, the Auditors Oversight Law charges the AOA with the supervision of auditors who audit the financial statements of market-traded companies from, or within, the Cayman Islands.

“This bill would permit the AOA to cooperate with equivalent overseas authorities, and similarly to the Monetary Authority (Amendment) Bill, 2016, it includes a provision to introduce regulatory-making power to allow for an administrative penalty regime, and stipulates the maximum penalty,” ministry officials explained.

The amendment to the Companies Management law removes references to bearer shares in the legislation following the abolishment of such shares earlier this year.

The ministry is also bringing long-awaited new legislation to deal with non-profits. In addition to supporting the offshore regulatory regime, the law will also regulate local charities, which will now be required to register if they wish to fund raise in Cayman and disclose details about the cash they collect from the public and how they spend it. (See related article here)

Alongside these bills, the Attorney General’s Chambers is also bringing several more bills that relate to the CFATF mutual evaluation process. In total more than a dozen pieces of legislation will be dealt with to ensure that the jurisdiction meets international standards and receives a clean bill of health from the evaluators.

“While previous mutual evaluations focused primarily on technical compliance, these evaluations will place greater emphasis on the actual effectiveness of the AML/CFT framework. Adherence to the international standard, as set by the Financial Action Task Force (FATF), is key to Cayman’s reputation as an international financial centre,” officials added.

See the new bills on the CNS Library

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Category: Finance, Financial Services

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