CAYMAN ISLANDS: New legislation introduces recording obligations for trustees and trust companies

(CNS): Two pieces of legislation have now come into force that will tighten up the regulatory regime for the management of private trusts and their administrators. The Private Trust Companies (Amendment) regulations, 2019 provides clearer definitions for terms given to those involved in the administration of trusts, while the Trusts (Transparency) Regulations, 2019 lists the information that must be maintained and updated by a trustee for a trust constituted under Cayman law.

Officials from the Ministry of Financial Services explained that the new legislation supports the recent measures to enhance transparency, such as disclosure requirements, for the trusts sector. The new legal framework also addresses the Caribbean Financial Action Task Force (CFATF)’s recommended action Cayman needed to take to strengthen the AML/CFT regime.

The jurisdiction is under a one-year “Observation Period” by the Financial Action Task Force (FATF), ending February 2020, in which it is expected to correct the AML/CFT strategic deficiencies. The FATF will review the progress made by the jurisdiction next June to determine if positive and tangible progress has been made.

Over the past five months, the AML/CFT regime in Cayman has been strengthened by the passage of 14 laws which are as follows:

  • Banks and Trust Companies (Amendment) Law, 2019
  • Trusts (Amendment) (No. 2) Law, 2019
  • Companies (Amendment) Law, 2019
  • Limited Liability Companies (Amendment) Law, 2019
  • Limited Liability Partnership (Amendment) Law, 2019
  • Mutual Funds (Amendment) Law, 2019
  • Insurance (Amendment) Law, 2019
  • Building Societies (Amendment) Law, 2019
  • Cooperative Societies (Amendment) Law, 2019
  • Money Services (Amendment) Law, 2019
  • Trade and Business Licensing (Amendment) Law, 2019
  • Proceeds of Crime (Amendment) Law, 2019
  • Securities Investment Business (Amendment) Law, 2019
  • Directors Registration and Licensing (Amendment) Law, 2019.