Reporting Requirements for SIBA Registrants

The new Securities Investment Business (Amendment) Act, 2019 is now in force, amending the Securities Investment Business Act (2019 Revision) introduced on 18 June 2019 (each together “SIBA 2019”).

SIBA 2019 has abolished the concept of the SIBA Excluded Person and replaced it with the SIBA “Registered Person”. Under Schedule 4 of SIBA 2019, entities that qualify as a SIBA Registered Person must meet one of the following criteria: (i) any company within a group dealing in a securities investment business, exclusively for one or more companies within the group of companies; (ii) a person carrying on securities investment businesses for sophisticated or high net worth investors; and (iii) a person who carries on a securities investment business and is regulated by an overseas regulator. Those persons that fall within one of the above three categories must register or re-register with the Cayman Islands Monetary Authority (the “Authority”) by 15 January 2020 (and each 15th January thereafter). Registration or re-registration requires an applicant to submit a fee and file an application form along with ancillary supporting documents.

Further changes under the law state that all Registered Persons must have two persons in management roles, specifically: (i) companies must have two or more directors, comprised of either one individual and one corporate director, or two individual directors; (ii) at least two managers in the case of limited liability companies; (iii) or at least two partners in the case of partnerships. Additionally, applicants will be required to demonstrate that their shareholders, directors and senior officers are all fit and proper persons.

There is now an ongoing obligation for Registered Persons to notify the Authority of any material changes to the information they provide to the Authority. Failure to notify the Authority within 21 days of the change of information may result in the Authority taking enforcement action against the registered person. Such notification also applies to cases where a registered person chooses to discontinue their securities investment business.

Lastly, SIBA 2019 gives the Authority enhanced powers of regulation, inspection and enforcement. Maximum penalties for non compliance with SIBA 2019 will constitute an offence and can result on summary conviction to imprisonment for a term of five years, a fine of up to CI$100,000 with additional penalties accruing of up to CI$10,000 each day for which the offence persists.

Failure to re-register as a SIBA Registered Person by 15 January 2020, will result in penalties accruing for delays and may result in de-registration by the Authority and consequentially an inability to continue trading in securities.

See Guidance Note on the Securities Investment Business Act.