Tuesday 17 September, 2019

Trust regulations take effect

Two pieces of legislation to clarify Cayman’s regime for trusts are now in force, as the Private Trust Companies (Amendment) (No. 2) Regulations, 2019 and Trusts (Transparency) Regulations, 2019 were gazetted on Friday, 16 August. 

The Private Trust Companies (Amendment) (No. 2) Regulations, 2019 provides clearer definitions for terms given to persons involved in the administration of trusts while the Trusts (Transparency) Regulations, 2019 lists the information that a person must maintain and keep updated when serving as a trustee for a trust constituted under Cayman law. Together, these regulations support the recent legislative measures to enhance transparency measures, such as disclosure requirements, for the trusts sector. 

The gazettal of this legislation supports the legal framework in place to address the Caribbean Financial Action Task Force (CFATF)’s March 2019 report on Cayman’s AML/CFT regime. The report outlines certain recommended actions to be taken by the Cayman Islands 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 strategic AML/CFT deficiencies. The FATF will review the progress made by the Cayman Islands at its June 2020 Plenary to determine if positive and tangible progress has been made towards addressing the deficiencies identified. 

Over the past five months, Cayman’s AML/CFT regime has been strengthened by the passage of 14 laws, namely: Banks and Trust Companies (Amendment) Law, 2019; Trusts (Amendment) (No. 2) Law, 2019; The Companies (Amendment) Law, 2019; The Limited Liability Companies (Amendment) Law, 2019; The 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; and the Directors Registration and Licensing (Amendment) Law, 2019.

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