Update: Importance of a Comprehensive Crisis Management Framework and CIMA’s Commitment to Implementation

Introduction

The Cayman Islands Monetary Authority (“CIMA” or “the Authority”) continues its commitment to safeguarding the stability and resilience of the Cayman Islands’ financial system amid ongoing global financial complexity and interconnected risks. This circular builds on the original circular issued on 10 January 2025 and reaffirms CIMA’s strategic direction. It also reflects key developments arising from the prior consultation on the proposed Rule and Statement of Guidance on Recovery and Resolution Planning. 

Status Update

Since then, CIMA has advanced several key initiatives aimed at embedding a structured crisis management framework within the Cayman Islands regulatory landscape:

Consultation on Rule and Statement of Guidance on Recovery and Resolution Planning

In January 2025, the Authority issued a combined Rule and Statement of Guidance for Recovery and Resolution Planning for public consultation. Retrospectively, following comments received during the consultation, the Authority determined that it is clearer to separate the Recovery Planning measure from the Resolution Planning requirements.

IMF Technical Assistance Mission

In March 2025, CIMA hosted an International Monetary Fund (“IMF”) Technical Assistance Mission (“Mission”) on the development of a Recovery and Resolution regime for deposit-taking institutions in the Cayman Islands. The Mission's findings and recommendations were consistent with CIMA’s approach to refocus the implementation of a Recovery Planning framework in the immediate term, pending future legislative reform, which will support a Resolution Planning regime.

Consultation on Rule and Statement of Guidance on Recovery Planning

In November 2025, CIMA issued for consultation a proposed RSOG for Recovery Planning (“RSOG”), which supersedes the previously proposed combined Rule and Statement of Guidance for Recovery and Resolution Planning published in January 2025. The deadline for feedback on the RSOG was 30 January 2026.

The proposed RSOG was developed to focus on Recovery Planning only, with a narrowed scope of application for deposit-taking institutions, that is, banks, including credit unions and development banks. This also aligns with the regulated entities within scope for the Regulatory Policy on Domestic Systemically Important Deposit Taking Institutions, which became effective in May 2024. Furthermore, this revised approach is also more consistent with the recommendations outlined in the Key Attributes for Effective Resolution of Financial Institutions issued by the Financial Stability Board.

Conclusion and Forward-Looking Considerations

During the first quarter of 2026, the Authority will review and finalise all feedback received on the RSOG with the intention of publishing the final RSOG, which is expected to become effective within twelve (12) months of being gazetted. This will ensure that recovery planning forms part of the regulatory requirements for regulated entities, enabling effective preparation for periods of financial stress. This ultimately enhances regulated entities' ability to stabilise and recover their financial positions without significant disruption to the financial system and economy.

Looking ahead, CIMA will focus on expanding the scope of application for recovery planning beyond deposit-taking institutions and continue its engagement with stakeholders to enhance awareness of the legislative and regulatory foundational work required to realise a resilient, forward-looking crisis management framework. This framework will support financial stability, protect stakeholders, and reinforce the Cayman Islands’ position as a robust international financial centre.