Obtaining the status of a registered person under SIBA in the Cayman Islands is worthwhile for conducting investment activity with securities without a full CIMA licence (the Cayman Islands Monetary Authority). Such a solution is suitable if the company works with professional, wealthy, intra-group or already regulated clients. The regime helps to enter the supervisory system of the islands faster than through full-fledged licensing. But it is not suitable for a mass retail model.
The obtaining of the Registered Person Filing status in the Cayman Islands applies to separate types of activity with investments in securities. This concerns work that falls under the Securities Investment Business Act (SIBA).
The Registered Person status is not considered a full-fledged licence for activity with investments in securities. It applies to persons and companies that correspond to the special conditions of registration provided for by SIBA. After the arrangement of the status of a registered entity in the Cayman Islands, the company works only within the limits of the declared model. If the clients, the powers, the contracts or the type of operations change, the status needs to be re-checked.
Obtaining the Status of a Registered Person in the Cayman Islands: Whom the Registered Person Filing Is Suitable For
This regime is intended for closed models with an understandable composition of clients, contracts and financial instruments.
A Cayman Management Company for a Fund
The registration status in the Cayman Islands may be arranged by a company that provides services to an investment fund or another professional structure. The main scenario is the management of, or advising on, securities without entering the retail market.
Such a model requires a precise check of the contracts. It is necessary to determine who takes the investment decisions and signs the transactions, where the clients are located and which instruments are included in the portfolio. If the powers are broader than the registration basis, a full-fledged licence may be required.
An Investment Adviser for Qualified Clients
The status of a person entered into the register may be arranged in the Cayman Islands for recommendations on shares, debt instruments, options, futures, shares of funds and other securities. The adviser analyses the assets and gives advice. They must not turn the service into a mass offer for private investors.
An Intra-Group Investment Structure
The status of a registered legal entity in the Cayman Islands may be obtained by companies that work only with participants of one group. This may be the investment division of a holding, a family office or a treasury centre.
Such a structure usually does not service external clients. Its task is to centralise operations with securities within the group. Upon going beyond this model, the basis for registration may disappear.
A Foreign Regulated Company
The regime may apply to a person who is already regulated abroad for activity with securities. The list of recognised foreign regulators is published by CIMA separately. This model requires a check of the foreign permit. What matters are the jurisdiction, the type of licence, the actual activity and the coincidence of the foreign supervision with the Cayman service.
The Requirements for a Company for Obtaining the Registered Person Status in the Cayman Islands
In order to obtain the status of a registered person in the Cayman Islands, the applicant must show an understandable management structure, a source of funds, an admissible client base and a working system of financial control.
The Legal Structure
The status of a registered entity in the Cayman Islands may be obtained by a company or another structure if it falls under SIBA. With the participation of a foreign person, the connection with the islands is checked. The place of conducting activity, the contractual base and the role of the Cayman structure are also assessed.
If the model is built through a fund, a management company or an adviser, the documents must coincide with the declared function. An inconsistency between the contract, the description of the business and the real powers increases the risk of additional requests from CIMA.
The Registered Office
For a number of models, a registered office on the islands is needed. It may be provided by a certified corporate provider.
The registered office is not equal to a full-fledged operational premises with personnel. But through it, the connection with CIMA, the submission of forms, the storage of corporate data and the receipt of regulatory notifications are often coordinated.
The Management and the Controlling Persons
When arranging the status of a registered person in the Cayman Islands, CIMA assesses the management, the shareholders and the beneficiaries. The business reputation, the experience in the financial sector, honesty, financial stability and sanctions risks are checked.
For each significant person, a passport, confirmation of the address, a CV, information about the professional experience, data about the origin of the capital and the source of the funds are prepared.
Directors under the DRLA Regime
The Directors Registration and Licensing Act (DRLA) may require the obtaining of permit documents for the managers of covered companies. The question is checked before the submission for the arrangement of the Registered Person status in the Cayman Islands.
The risk arises for the directors of companies that conduct activity with securities and fall under the supervision of CIMA. For a specific structure, it is necessary to determine whether it relates to a covered company and which regime the director needs.
Internal Control
In order to obtain the status of a registered person in the Cayman Islands, the company must have working procedures for the identification of clients, the assessment of risks, sanctions checking, the storage of documents and reports on suspicious operations. These rules must correspond to the client base and the types of securities.
For an investment company, the categories of clients, the jurisdictions of operations, the sources of funds and the procedure for the approval of transactions are especially important. The documents must not be general. CIMA may request additional information for the assessment of the application.
Capital
A special minimum capital for obtaining the Registered Person status under SIBA in the Cayman Islands is not established. But the company must have sufficient funds for the activity, the payment of CIMA's fees, the registered office, the directors, the auditor, the responsible persons and the support of financial monitoring.
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How to Obtain the Registered Person Status in the Cayman Islands: the Procedure for Entry into CIMA's Register
The procedure for obtaining the status of a registered person in the Cayman Islands goes through the electronic REEFS portal and includes the following stages:
The services of the company, the types of securities, the contracts, the clients, the source of income and the powers of the management are analysed in order to determine the application of SIBA.
The model is compared with the norms of SIBA. If there is a basis, a Registered Person Filing is arranged. Otherwise, a full-fledged licence for activity with investments in securities is considered.
A new company is created or the documents of an existing person are updated, a registered office is arranged, directors are appointed, the registers and corporate resolutions are put in order.
Procedures are developed for financial monitoring, the checking of clients, sanctions, the storage of documents, the management of risks and reports on suspicious operations.
Questionnaires, passports, confirmations of addresses, CVs, information about the experience, data about the source of the funds and documents on the origin of the capital are prepared.
The application for obtaining the Registered Person status in the Cayman Islands is filled out in REEFS, where roles are assigned for the preparation, checking, approval and sending of the form.
After the check of the data, the form is sent through REEFS to the Monetary Authority. Upon sending, it obtains the Submitted status, after which CIMA's analyst takes the file into work. The applicant pays the fee according to the current tariff.
The regulator checks the application, the basis of the registration, the information about the owners, the management, the clients, the internal rules, and may return the file for correction or request additional explanations.
If the regulator is satisfied with the submitted information, it issues a letter of registration. After this, the company may conduct activity only within the limits of the declared model.
Conclusion
Professional legal support of the obtaining of the status of a registered person in the Cayman Islands makes it possible to check the client model in advance, to prepare the documents for CIMA, to align the internal rules with the actual activity and to bring the procedure to the required result. This reduces the risk of the return of the file, superfluous requests from the regulator and errors that may change the legal assessment of the project.
Is the obtaining of the Registered Person status under SIBA in the Cayman Islands considered a licence?
No. This is a registration with CIMA — the Monetary Authority. Such a status is obtained by persons who are exempt from a full-fledged licence for activity with investments in securities. As a result of the procedure, a confirmation of registration is issued.
Is it possible, after obtaining the status of a registered entity in the Cayman Islands, to work with retail clients?
Usually no. The Registered Person is intended for the limited categories of clients provided for by SIBA. If the company plans to offer services to private clients on a mass scale, it is necessary to obtain a full-fledged licence.
Is it possible to manage the assets of a fund after the arrangement of the registration status in the Cayman Islands?
Yes, if the activity, the clients and the contracts correspond to the basis for registration. If the management model goes beyond the limits of the norms of SIBA, a different regulatory construction will be required.