The Companies Management Law gives the Cayman Islands Monetary Authority the responsibility of regulating company management / corporate services business in the Cayman Islands. This includes licensing, ongoing supervision, and enforcement.
Section 3(1) of the Companies Management Law defines the "business of company management" as the provision of the corporate services specified in 3(1)(a) through (l) for profit or reward in or from within the Cayman Islands.
In accordance with the Companies Management Law, CIMA may issue the following categories of licences:
Company Manager Licence - This authorises the holder to provide corporate services as listed in Section 3(1) or any other corporate services as may be prescribed under that section.
Corporate Service Provider Licence - This authorises the holder to provide only the corporate services specified in Section 3(1)(a) through (e).
CIMA regulates company management business in accordance with:
The day-to-day regulatory oversight of the sector falls to CIMA's Fiduciary Services Division, which is responsible for:
A primary objective of the Authority is to maintain a first class financial system and a supervisory system that reflects international supervisory standards. It does so through integrated off-site and on-site functions, the actual processes of which are reviewed continuously in light of experience and changes in the global financial industry.
On-site work includes a review of the licensees' control environment, and compliance with laws, regulations and supervisory directives. The inspection tests transactions to evaluate the effectiveness of the control environment and whether fiduciary duty is being upheld. As part of the inspection, discussions are held with the external auditors to review the licensees' strength of internal controls, compliance with legislation and prudential standards, and adequacy of provisions.
The objective of the supervisory system is to foster prudent fiduciary practices that will enhance the financial sector. In those instances where a licensee engages in conduct detrimental to the public interest or threatens the safety of clients' assets, the legislation provides remedial powers. These can include revoking or imposing conditions on the licence, and changing management and directors.