An Excluded Person cannot continue to conduct securities investment business after 15 January 2020 unless it has been re-registered or registered as a Registered Person by that date, or has been granted a license under section 6 of the Securities Investment Business Law (2019 Revision) ("SIBL").

All currently registered Excluded Persons must submit the following two forms, regardless of whether they intend to be considered for re-registration as a Registered Person:

• AIR-157-75 - AML/CFT Inherent Risk - Securities
• ARC-158-75 - AML/CFT Risk Controls - Securities

Additionally, to be considered for re-registration as a Registered Person, a currently registered Excluded Person must submit the following form:

• RRP-160-75 - Application to Re-register

If an Excluded Person does not submit the AML/CFT reporting forms AIR-157-75 and ARC-158-75 by 15 August 2019, they will lose the opportunity to benefit from the re-registration process under the transitional provisions of the SIB Amendment Law.

If the Excluded Person wishes to continue conducting securities investment business in or from within the Cayman Islands after the transition period ends on 15 January 2020, they will need to meet all application requirements applicable to new applicants under either section 5 or section 6 of SIBL for registration as a Registered Person or for a license under SIBL. This includes submitting a new application form and fee, and being in good standing with all filing requirements, including the AML/CFT reporting forms AIR-157-75 and ARC-158-75. An Excluded Person that has not been registered as a Registered Person or granted a license by the Authority by 15 January 2020 will not be permitted to conduct securities investment business in or from within the Cayman Islands until they have been properly registered or licensed under SIBL. A previous failure to comply with filing requirements under SIBL or the AML/CFT Regulations may be grounds for the Authority to refuse registration.

A material change includes any alteration to the information required for a registration application or annual declaration. Such changes must be reported in writing, with a detailed explanation and relevant supporting documentation, to [email protected].

To apply for registration as a Registered Person, the applicant must submit Form APP-101-75 “Application for SIBL Registered Person” through the Regulatory Enhanced Electronic Forms Submission (REEFS) portal via the applicant’s registered office. The form must be accompanied by all required supporting documents and the applicable application fee.

If the Registered Person is a company incorporated under the Companies Law (2018 Revision), it must have either (a) a minimum of two individual directors, or (b) one corporate director, each compliant with the Directors Registration and Licensing Law, 2014. For foreign companies registered under Part IX of the Companies Law (2018 Revision), a minimum of two directors or equivalent officers is required. If the Registered Person is established or registered under another Cayman Islands law, refer to section 15(4) of SIBL as revised under the SIB Amendment Law.

According to Section 2 of the Securities Investment Business Law (SIBL), a "high net worth person" is defined as an individual with a net worth of at least $800,000 or an entity with total assets of at least $4,000,000.

Schedule 1 of the Securities Investment Business Law (SIBL) defines "securities" as:

1. Shares or stock of any type in the share capital of a company.
2. Debentures, loan stock, bonds, certificates of deposit, and other debt instruments, excluding various banking and monetary instruments such as cheques, mortgage instruments, and land charges.
3. Warrants and similar instruments that grant the holder the right to subscribe for certain securities.
4. Certificates or instruments that confer contractual or proprietary rights.
5. Options on any security, currency, precious metal, or another option.
6. Futures.
7. Rights under contracts for differences (e.g., cash-settled derivatives such as interest rate and stock index futures, forward rate agreements, and swaps).

Schedule 2 of the Securities Investment Business Law (SIBL) outlines the following regulated activities:

1. Dealing in securities: This involves buying, selling, subscribing for, or underwriting securities as an agent or principal, including market-making activities. This excludes own-account dealing unless there is a holding out or solicitation.

2. Arranging deals in securities: This includes making arrangements for another person (whether as principal or agent) to buy, sell, subscribe for, or underwrite securities.

3. Managing securities: Managing securities that belong to another person, with discretionary authority.

4. Advising on securities: Providing advice to an investor or potential investor on buying, selling, underwriting, subscribing for, or exercising any rights conferred by a security.

The SIBL applies only to those who engage in these activities as a business, meaning they provide these services for profit or reward.

Disclaimer: Entities registered as Excluded Persons are exempt from obtaining a license to conduct securities investment business, as they conduct business exclusively with persons or institutions listed in Schedule 4 of the SIBL and are therefore not regulated by the Authority.

Section 4(1) of the Securities Investment Business Law (SIBL) identifies two types of entities with sufficient connection to the Cayman Islands to fall under the geographical scope of the SIBL (subject to the Schedule 4 exclusions):

1. Any Cayman Islands company or partnership, regardless of where it conducts securities investment business as defined by the law.
2. Any person with an established place of business in the Cayman Islands through which they conduct securities investment business as defined by the SIBL.

Additionally, foreign entities without a Cayman Islands presence but engaging in securities investment business targeting Cayman Islands residents, such as through emails or investment seminars, could be subject to restrictions. These activities are typically prohibited to protect domestic investors unless the foreign entity:

1. Is working in conjunction with a person licensed or registered under the SIBL.
2. Was approached by a Cayman Islands person without any solicitation.

1. Schedule 3 of the Securities Investment Business Law (SIBL) outlines activities that, although they may appear to fall under the SIBL, are considered outside its scope. These excluded activities generally include:

       1. Internal company, trust, or partnership activities (e.g., risk management, certain dealings in its own securities, treasury functions);
       2. Incidental activities that are secondary to core non-securities investment business activities, where the remuneration is not separate from the core activity (e.g., legal or accounting advice); and
      3. Activities not intended to solicit the general public to engage in securities investment business (e.g., general investment advice published in any media).

2. The exclusion related to the disposal of goods or supply of services applies when a supplier engages in securities investment business solely to facilitate the disposal or supply or to hedge against price fluctuations of raw materials used in manufacturing for a customer.
3. There is also an exclusion for making arrangements solely for providing financing for another person's securities dealings.
4. Schedule 4 of the SIBL identifies categories of persons ("Excluded Persons") who can conduct securities investment business without a license. These categories include:

          1. A company within a group that conducts securities investment business exclusively for companies within the same group;
          2. Persons involved in a joint enterprise (e.g., mergers, buy-outs, joint ventures);
          3. Various government entities;
          4. Persons conducting securities investment business exclusively for sophisticated or high-net-worth individuals, provided they have a registered office in the Islands through a licensed service provider;
          5. Persons subject to regulation by a recognized Overseas Regulatory Authority (ORA) in the jurisdiction where the securities investment business is conducted; and
          6. Persons conducting securities investment business solely in specific capacities, such as director, partner, liquidator, trustee in bankruptcy, receiver, executor, or administrator, provided statutory conditions on remuneration and representation are met.

5. Section 5(4) of the SIBL requires those who fall under paragraphs 1, 4, and 5 of Schedule 4 to register with the Authority, submit an Annual Declaration Form approved by the Authority, and pay an annual fee. (See our Fee Schedule for details).

Disclaimer: 

Please note that entities registered as Excluded Persons are exempt from the requirement to obtain a license to conduct securities investment business, as they conduct business exclusively with persons or institutions listed in Schedule 4 of the SIBL and are therefore not regulated by the Authority.

1. The Authority must be confident that an applicant meets high standards in all relevant aspects, is financially sound, and is competent and capable of performing the activities for which they seek a license.
2. When assessing fitness and propriety, the Authority will consider all factors relevant to the application, including but not limited to:

   1. Honesty, reputation, and integrity
   2. Competence and capability
   3. Financial soundness

3. Before making a final decision, the Authority will also assess any potential reputational risks to the Cayman Islands in granting the license.

Section 2 of the Securities Investment Business Law (SIBL) defines a "sophisticated person" as someone who:

   1. Is regulated by the Authority;
   2. Is regulated by a recognized overseas regulatory authority;
   3. Has securities listed on a recognized securities exchange;
   4. Or who, due to their knowledge and experience in financial and business matters, can reasonably be regarded as capable of evaluating the merits of a proposed transaction and engages in transactions of at least $80,000 per single transaction.

An SFO that conducts securities investment business as defined in section 4 of the Securities Investment Business Law (SIBL) is required to be licensed or registered if it falls under one of the categories specified in Schedule 4 of the SIBL.

For detailed information, please refer to the Securities Statistics section.

Under the Securities Investment Business (Financial Requirements and Standards) Regulations, licensees involved in Securities Investment Business must meet specific financial resource requirements. For broker dealers, market makers, and securities managers, the base financial resource requirement is CI$100,000, while for all other licensees, the requirement is CI$15,000.

While entities may choose an auditor from the Authority’s approved list, they also have the option to select any qualified auditor, in accordance with Section 13(1) of the Securities Investment Business Law, to provide auditing services.

All entities holding a Securities Investment Business Licence under the Securities Investment Business Law (SIBL) must maintain adequate insurance coverage. This includes insurance for i) Professional Indemnity, ii) Professional Liability of Senior Officers and Corporate Secretaries, and iii) Business Interruption, as mandated by Section 4(1) of the Securities Investment Business (Conduct of Business) Regulations.

For further guidance, refer to the Authority’s Statement of Guidance – Professional Indemnity Insurance for Trust, Insurance, Mutual Fund Administrator, Securities Investment Business, and Company Management Licensees, and Directors.

The insurance coverage must be provided by an insurer licensed to conduct domestic business in the Cayman Islands. Securities Investment Business licensees must maintain insurance that covers claims involving i) the licensee, ii) current or former officers or employees, and iii) any third-party agents, service providers, or consultants associated with the licensee. The Professional Indemnity insurance should have a minimum limit of CI$1,000,000/US$1,219,512.20 per claim and CI$1,500,000/US$1,829,268.29 in aggregate.

According to the Securities Investment Business Law (SIBL), and subject to Section 5(2), any person who conducts securities investment business as outlined in Schedule 2, and meets one of the following criteria, is required to hold a licence:

(i) A company incorporated under the Companies Law;
(ii) A general partnership established under the Partnership Law;
(iii) A limited partnership registered under the Partnership Law;
(iv) An exempted limited partnership registered under the Exempted Limited Partnership Law;
(v) A foreign company registered under Part IX of the Companies Law.

Additionally, if the person has established a place of business in the Cayman Islands through which such activities are conducted, a licence is required under the SIBL.

An entity that engages in securities investment business, as defined by Section 4(1) of the Securities Investment Business Law (SIBL), may be required to obtain a licence under the SIBL unless it is exempted under Schedule 3 or excluded from licensing under Section 5(2) and Schedule 4 of the SIBL.

Note: Entities registered as Excluded Persons are exempt from the requirement to obtain a licence to conduct securities investment business, as they exclusively engage with persons or institutions listed in Schedule 4 of the SIBL and are therefore not regulated by the Authority.

If a licensee’s director also serves as a director of a “covered entity,” they are required to register through the Directors portal in compliance with the DRLL. Additionally, they must receive formal approval from the Authority to act on a Securities Investment Business licence. Please note that the authorization to act as a director for a licensee is a distinct process from the authorization to act as a director for a “covered entity.”

Note: Under the DRLL, a “covered entity” refers to (a) a company as defined in paragraphs 1 and 4 of Schedule 4 of the Securities Investment Business Law; or (b) a mutual fund regulated by the Mutual Funds Law.

The original Securities Investment Business licence issued by the Cayman Monetary Regulatory Authority International must be returned for cancellation. If the licence has been lost, an affidavit signed by the operator must be provided, stating that the licence will be returned to the Authority if found.

Under Section 8 of the Securities Investment Business Law (SIBL), no shares in a company or interests in a partnership that is a licensee shall be issued, and no issued shares or interests shall be voluntarily transferred or disposed of without the prior approval of the Authority.

Furthermore, Section 14(1) of the SIBL requires that a licensee obtain written approval from the Authority before opening a subsidiary, branch, agency, or representative office outside the Cayman Islands, or before changing its name.

Finally, Section 10 of the Securities Investment Business (Financial Requirements and Standards) Regulations mandates that a licensee must obtain written consent from the Authority before altering or changing the nature of its capital or the rights and obligations of its shareholders. Additionally, a licensee must report the acquisition of 10% or more of the voting shares of another company and obtain prior written consent from the Authority for any agreements to sell or merge the whole or part of the licensee with a third party.

To cancel a Securities Investment Business licence, the following items must be submitted to the Cayman Monetary Regulatory Authority International:

• The original Securities Investment Business Licence issued by the Authority, or if lost, an affidavit signed by the operator stating that the licence will be returned to the Authority if found;
• The prescribed fee for surrendering the licence;
• A certified copy of the directors’ resolution confirming that the licensee has ceased licensable securities investment business, signed and dated by the directors;
• A certified copy of the Certificate of Dissolution (if applicable);
• An affidavit from the directors verifying the following:
  • The licensee is no longer conducting business under the Securities Investments Business Law;
  • The date on which such business ceased;
  • The licensee has operated in accordance with its Articles of Association;
  • The licensee has not been wound up in a manner prejudicial to its creditors.

• Stamped copies of the CWR Forms 19 and 20, filed with the Registrar of Companies (if a liquidator has been appointed);
• Audited Financial Statements covering the period from the last financial year-end (for which audited statements have been filed) to either the date of commencement of winding up (if a third-party liquidator has been appointed) or to the date of the directors' resolution confirming the cessation of licensable securities investment business, if no third-party liquidator has been appointed;
• A copy of the liquidator's report (if applicable) or confirmation from the licensee’s auditor that the licensee has no outstanding liabilities or creditors.

Additionally, the licensee must ensure that all fees and statutory requirements are up to date before proceeding with the licence cancellation.

Note: The Cayman Monetary Regulatory Authority International reserves the right to request additional information as deemed necessary.

If there is a change in the licensee’s service provider, the licensee must notify the Authority of any potential changes and, where necessary, submit a letter of acceptance from the newly appointed service provider along with the required fee to update the Cayman Monetary Regulatory Authority International’s records.

To appoint a director to a licensee, the following documents must be submitted to the Cayman Monetary Regulatory Authority International:

• A police clearance certificate/affidavit of no convictions
• One financial reference and two personal references
• Application fee

If the applicant is already serving as a director on another licensee, references do not need to be submitted.

For more information, please refer to Securities Licensing and Authorisation Requirements.

Disclaimer:

Entities registered as Excluded Persons are exempt from the requirement to obtain a licence to conduct securities investment business, as they exclusively deal with persons or institutions listed in Schedule 4 of the SIBL, and are therefore not regulated by the Authority.

The registration fee for an Excluded Person is CI$5,000.00 / US$6,097.56.

Once the required Declaration Form and registration fee have been submitted to the Authority, the registration process for an Excluded Person typically takes 3-5 business days.

The annual fee for an Excluded Person is CI$5,000.00 / US$6,097.56.

Annual fees for Excluded Persons must be paid by January 31st each year.

The Authority generally recommends appointing two (2) directors for any registered entity. However, only one (1) director is required when registering as an Excluded Person.

Yes, the Authority requires that a local service provider be appointed to offer Registered Office services.

Yes, since an Excluded Person is considered a covered entity under the Director Registration and Licensing Law, 2014, any individual acting as a director must be registered with the Authority.

No, Excluded Persons do not receive a Certificate of Registration. However, the Authority will send a formal letter confirming the entity's registration as an Excluded Person.

To maintain registration, the prescribed annual fee and Declaration Form must be submitted to the Authority by January 31st each year.

The Authority will accept an electronic submission of the Declaration Form, provided that the original form is filed within one month.

To de-register an Excluded Person, the Authority requires a formal letter from the directors or authorized service provider confirming that the entity has ceased conducting securities business and no longer wishes to remain registered.

No, there is no fee for de-registering an Excluded Person.

Yes, the Authority will issue a formal letter confirming that the entity is no longer registered as an Excluded Person.