Insights

Changes to the Cayman Islands beneficial ownership provisions will come into force on 29 June 2020 which directly impact Registered Persons. Those companies that are registered as Registered Persons under the Securities Investment Business Law (Law) will no longer be required to comply with the beneficial ownership obligations under the Companies Law or the Limited Liability Companies Law, as applicable.

The COVID-19 outbreak has forced many countries to implement measures to prevent the spread of the pandemic and has caused a major shock to the worldwide economy and financial markets. The approach of competent authorities responsible for the oversight of the financial services industry has been no different: new times call for new measures, or at least a reminder of the measures firms should already be following to protect the investing public.

The Cayman Islands beneficial ownership regime has been amended and the following important changes will commence on 29 June 2020: New administrative fines will apply for companies that breach specified beneficial ownership provisions of the Companies Law or the Limited Liability Companies Law, responsibility will be placed on the registered office provider, instead of the company, with respect to restrictions notices and companies registered as a “Registered Person” under the Securities Investment Business Law will be exempt from the beneficial ownership requirements set out in the Companies Law or the Limited Liability Companies Law.

In our sixth episode, Transactional Partner Rachel Graham and Transactional Counsel Thomas Dugdale discuss the following: what a continuation, “re-domiciliation” or “migration” is, why continue or migrate to another jurisdiction practical considerations of continuing your company in or out of a jurisdiction, how continuations might affect creditors and other interested parties, and commonly encountered issues and solutions.

In mid-2020, the Cayman Islands government introduced a new framework for regulating virtual asset businesses, known as “virtual asset service providers” (VASPs). The framework implements Financial Action Task Force (FATF) recommendations for registering and licensing VASPs, clearly defines what virtual assets are and which constitute securities, enables funds to use virtual assets as representations of equity interests, recognises virtual asset trading exchanges and introduces a regulatory sandbox licence. The new framework is not yet in force.

In the fourth episode of our Funds Download podcast series, our host and the Global Head of Funds and Regulatory, Philip Graham, is joined by the Head of our Luxembourg Investment Funds team, Vanessa Molloy, to take a closer look at the reasons why Luxembourg is such a successful investment funds jurisdiction, and the main factors to consider if you are thinking of establishing a Luxembourg structure.