As defined in section 2 of the Banks and Trust Companies Act, “trust business” means the business of acting as trustee, executor or administrator.
The Banks and Trust Companies Act and the Private Trust Companies Regulations give the Cayman Islands Monetary Authority the responsibility of regulating the trust industry in the Cayman Islands. This includes licensing / registration and ongoing supervision.
In accordance with the The Banks and Trust Companies Act, the following categories of trust licences / registrations may be issued:
The Cayman Islands Monetary Authority regulates trust business in accordance with:
The Fiduciary Services Division 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 acts, 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.