the cyprus securities and exchange commission (cysec) recently issued circular e743, introducing significant updates to liquidity management requirements for alternative investment funds (aifs) and undertakings for collective investment in transferable securities (ucits).

this circular addresses the implementation of directive (eu) 2024/927 (the aifmd ii), which amends directive 2011/61/eu (the aifmd) and directive 2009/65/ec (the ucitsd). these changes are not merely administrative, they represent a fundamental shift in how liquidity risk is managed across the european union. these amendments necessitate changes to national laws (law 56(i)/2013 and law 78(i)/2012 in cyprus), requiring fund managers to integrate specific liquidity management tools (lmts) into their constitutional documents.

this post outlines the key changes, critical compliance deadlines, and the specific actionable steps fund managers must take to ensure alignment with the new regulatory framework.

key lmts

central to this directive is the introduction of a harmonised list of nine lmts. this list provides a toolkit for managers to handle redemption pressures effectively.

the directive introduces the following tools:

1. suspension of subscriptions, repurchases and redemptions: temporarily halting trading
2. redemption gates: limiting the amount that can be redeemed on a single dealing day
3. extension of notice periods: increasing the time between a redemption request and settlement
4. redemption fee: charging a fee to redeeming investors to cover liquidity costs
5. swing pricing: adjusting the net asset value (nav) to reflect dealing costs
6. dual pricing: using bid and offer prices for subscriptions and redemptions
7. contribution to prevent impairment (anti-dilution levy): applying a levy to subscriptions or redemptions to protect remaining investors
8. redemption in kind: paying redemption proceeds in assets rather than cash
9. side-pockets: segregating illiquid assets from the main portfolio

selection requirements

under the new rules, aifms managing open-ended aifs and ucits management companies must select at least two appropriate lmts from the list above (specifically from points 2 to 8).

crucially, the selection cannot consist solely of swing pricing (5) and dual pricing (6). these tools must be included in the fund's rules or instruments of incorporation for potential use in the best interests of investors.

compliance deadlines and requirements

cysec has established a clear timeline for compliance. adherence to these dates is critical to avoid regulatory friction.

submission details

entities must submit applications or notifications to cysec to amend their fund rules or instruments of incorporation. these submissions must be accompanied by:

• a confirmation statement: declaring that the suitability of the selected tools has been assessed against the fund’s investment strategy, liquidity profile, and redemption policy.
• applicable fees: payment of the relevant fees as determined by current directives.

exemptions and special cases

while the directive applies broadly, specific nuances exist for certain fund types.

• money market funds (mmfs): if an open-ended aif or ucits qualifies as a money market fund under regulation (eu) 2017/1131, the manager is only required to select one liquidity management tool from the list (points 2 to 8), rather than two.
• exceptional activation: in extraordinary circumstances where it serves the investors' best interests, managers may activate suspension of redemptions (1) or side-pockets (9) even if these tools were not explicitly included in the fund's constitutional documents.

next steps for fund managers

ensure your fund is prepared for the upcoming changes. review your liquidity management strategy, update your governing documents.

for comprehensive details, refer to circular e743 here (only in greek)

the jersey institute of directors (iod) introduced comprehensive ai adoption guidelines to assist directors and senior leaders in navigating the complexities of integrating artificial intelligence (ai) into their organisations. these guidelines aim to address hesitations around ai adoption and provide a structured framework for responsible and effective implementation.

key highlights:

• strategic importance of ai: ai is no longer optional but a strategic priority for businesses, offering opportunities to enhance productivity, customer experiences, and competitive positioning.
• five-step framework for ai adoption:
  • identify use cases aligned with business goals and return on investment (roi).
  • address cultural and technical barriers to adoption.
  • plan internal and external resources for implementation.
  • establish governance structures for safe and ethical ai use.
  • define metrics to measure success and impact.
• ai readiness assessment: a tool to evaluate organisational preparedness across data, talent, technology, culture and governance.
• ethical and responsible ai: emphasis on fairness, transparency, accountability, and compliance with data protection laws.
• governance and risk management: boards are encouraged to adopt robust oversight mechanisms, including ai governance policies, risk management frameworks and ethical principles.
• workforce transformation: ai adoption requires upskilling employees, fostering collaboration, and addressing concerns about job displacement.

why ai matters:

ai offers transformative potential by enabling data-driven decisions, automating routine tasks, and creating new business opportunities. however, its adoption must be guided by strategic alignment, ethical considerations and measurable outcomes.

the iod jersey guidelines provide a roadmap for directors to confidently lead ai initiatives, ensuring alignment with organisational values and long-term goals. by fostering a culture of innovation and responsible use, businesses can harness ai as a tool for sustainable growth and competitive advantage.

for more details, the press release can be found here and the guidelines here

on 17 march 2026, the european commission initiated a public consultation to revise the technical screening criteria (tsc) under the eu taxonomy regulation (regulation (eu) 2020/852). this framework aims to facilitate sustainable investment by defining criteria for economic activities that contribute to the eu's six environmental objectives: climate change mitigation, climate change adaptation, sustainable use of water and marine resources, circular economy, pollution prevention and control, and biodiversity protection.

as part of this process, the european commission has published draft amendments to two key delegated acts:

• taxonomy climate delegated act((eu) 2021/2139) – enhancing usability of tsc for climate-related objectives.
• taxonomy environmental delegated act((eu) 2023/2486) – improving tsc usability for broader environmental goals.

the proposed revisions aim to simplify and improve the framework's usability, reflecting stakeholder feedback and technological advancements. key sectors addressed include forestry, environmental protection, manufacturing, energy, transport, and construction. the amendments also refine the "do no significant harm" (dnsh) criteria.

the consultation is open until 14 april 2026, with the commission planning to adopt the revised legislation in q2 2026.

about the eu taxonomy regulation

the eu taxonomy regulation, a cornerstone of the eu’s sustainable finance framework, establishes a unified classification system for environmentally sustainable economic activities. it aims to direct investments toward projects aligned with the european green deal and the eu’s 2030 climate and energy targets. by providing clear criteria, the taxonomy fosters market transparency, mitigates greenwashing, and supports companies and investors in identifying sustainable opportunities.

the regulation defines six overarching environmental objectives and relies on technical screening criteria, developed through delegated acts, to assess activities' alignment with these goals.

for more information, the news release can be found here

the european commission launched a targeted consultation on private equity exits, open from 2 march 2026 to 27 april 2026. this initiative aims to address challenges faced by private equity investors in the eu when exiting investments, such as limited liquidity and valuation issues, which hinder market activity and growth capital availability.

the consultation explores potential solutions, including the creation of a multilateral platform for secondary trading of private company shares, which could enhance liquidity, reduce costs, and support private companies' transition to public markets. the initiative forms part of the european commission's broader efforts to deepen eu capital markets and improve access to financing for growth companies.

key areas of focus include:

• identifying barriers to private equity exits and proposing regulatory or non-regulatory solutions.
• evaluating the design and regulatory framework for a secondary trading platform, ensuring efficient price discovery, investor protection, and market integrity.
• assessing the platform's potential to raise fresh equity capital for private companies.

the consultation also highlights the need to balance transparency, disclosure and investor protection with the protection of commercially sensitive information held by private companies. stakeholders, including private equity funds, companies and public authorities, are invited to submit feedback through the commission's online questionnaire.

for more information the official publication can be found here

on 9 february 2026, the eu’s anti-money laundering authority (amla) launched public consultations on three draft regulatory technical standards (rts) to harmonise anti-money laundering (aml) and counter-terrorist financing (cft) measures across the eu. these consultations invite input from stakeholders in both financial and non-financial sectors to ensure comprehensive and practical standards.

key draft rts and objectives:

• business relationships (article 19(9) of regulation (eu) 2024/1624)
  defines criteria for identifying business relationships, occasional transactions, and linked transactions, forming the basis for customer due diligence obligations.
• customer due diligence (article 28(1) of regulation (eu) 2024/1624)
  outlines procedures for verifying customer identity and conducting ongoing monitoring in a risk-sensitive and proportionate manner.
• enforcement (article 53(10) of directive (eu) 2024/1640)
  establishes a unified supervisory approach for assessing and addressing breaches of aml/cft obligations.

consultation details:

• deadlines for feedback:
• business relationships and customer due diligence: 8 may 2026
• enforcement: 9 march 2026
• public hearing: an online session for the draft rts on business relationships and customer due diligence was scheduled for 24 march 2026.

cysec circular c755:

the cyprus securities and exchange commission (cysec) issued circular c755 to inform regulated entities, including financial institutions, crypto asset service providers and crowdfunding platforms, about these consultations. cysec urges stakeholders to actively participate and provide feedback on the draft rts.

importance of non-financial sector participation:

amla highlights the significant role of the non-financial sector in combating financial crime and encourages their engagement in shaping these standards. resources, including an explainer on sector-specific obligations, are available on amla’s website.

call to action:

stakeholders are encouraged to review the draft rts and submit their input via amla’s public consultation platform. these efforts aim to establish a robust, risk-based, and proportionate aml/cft framework applicable across the eu.

amla’s press release can be found here and cysec’s circular c755 here

on 24 february 2026, the bermuda ministry of justice issued aml-atf ministerial advisory 1/2026, emphasising the need for enhanced due diligence (edd) and enhanced ongoing monitoring on a risk-sensitive basis in business relationships involving jurisdictions identified as high-risk for money laundering and terrorist financing. this advisory aligns with the proceeds of crime (anti-money laundering and anti-terrorist financing) regulations 2008, which mandate risk-sensitive edd measures for transactions linked to such jurisdictions.

key points include:

• high-risk jurisdictions: the financial action task force (fatf) has identified countries with strategic deficiencies in their aml/cft frameworks. these include the democratic people's republic of korea (dprk), iran, and myanmar, among others. specific countermeasures and edd are advised for these jurisdictions.
• fatf statements: on 13 february 2026, fatf released statements categorising jurisdictions into:
  • high-risk jurisdictions (black list): countries requiring countermeasures, such as dprk and iran.
  • jurisdictions under increased monitoring (grey list): countries working to address deficiencies, including algeria, kenya, and vietnam.

• regulatory compliance: entities and persons subject to bermuda’s aml/cft regulations, including financial institutions, independent professionals, and real estate agents, must implement robust systems to mitigate risks associated with these jurisdictions.

• sanctions and monitoring: some jurisdictions, like dprk and iran, are subject to international sanctions, necessitating additional compliance measures under the international sanctions regulations 2013.

the advisory highlights the importance of consulting fatf publications and annexed statements for comprehensive risk assessments. it replaces previous advisories and reinforces bermuda’s commitment to combating financial crime in alignment with international standards.

bermuda’s aml-atf advisory 1/2026 can be accessed here

effective 16 april 2026, luxembourg introduces enhanced liquidity management obligations for ucits and open-ended aifs under the law of 3 march 2026, aligning with eu directive 2024/927.

key points include:

liquidity management tools (lmts)

• funds must select at least two lmts (eg swing pricing, redemption gates) from specified legal annexes, ensuring alignment with their investment strategy and liquidity profile.
• these tools must be disclosed in fund documentation and communicated to the cssf.

operational procedures

• detailed policies for activating/deactivating lmts are mandatory.
• notifications of lmt activations or deactivations must be submitted via the cssf’s new edesk platform.

edesk modules

• lmt selection module(launching 23 march 2026): funds must report their chosen lmts and related policies by 16 april 2026.
• lmt activation module(launching 16 april 2026): funds must notify the cssf of any exceptional lmt activations.

scope and compliance

• these rules apply to ucits, aifs, and other luxembourg-domiciled funds, with specific provisions for money market funds and side pockets.
• the cssf will notify relevant eu authorities of lmt activations.

this regulatory update aims to enhance investor protection and financial stability by ensuring robust liquidity management practices.

cssf’s communique can be found here.

effective from 18 march 2026, the government of jersey introduced significant amendments to the sanctions and asset-freezing (jersey) law 2019. these changes aim to align jersey’s sanctions framework more closely with international standards, particularly those of the uk and to strengthen jersey’s commitment to combating financial crime and ensuring compliance with global sanctions regimes.

key changes include:

• expanded prohibitions: restrictions on providing economic resources, funds, or financial services to designated persons now explicitly extend to entities owned or controlled by such persons.
• broader reporting obligations: relevant financial institutions (rfis) must report to the minister for external relations if they know or suspect someone is a designated person or involved in an offence under the law. this obligation applies regardless of whether the institution has a direct connection (e.g., account or dealings) with the individual.
• enhanced disclosure powers: the minister may disclose information obtained under the law to competent authorities outside the uk and eu or to other parties if deemed appropriate.
• clarifications on indirect availability: new provisions define "indirectly making resources available" to include entities controlled by designated persons.

rfis and other stakeholders are advised to review their compliance processes and submit reports promptly if required.

for further details read the government of jersey’s update here

the sanctions and asset-freezing law (jersey) amendment regulations 2026 can be found here

on 27 february 2026, published in the official journal of the european union, regulatory technical standards (rts) introducing harmonised rules for liquidity management tools (lmts) applicable to alternative investment fund managers (aifms) and undertakings for collective investment in transferable securities (ucits) across the eu.

these rts aim to enhance financial stability and bolster investor protection, particularly during periods of market stress.

these standards provide detailed specifications for the characteristics of various lmts, ensuring their consistent application and operation. moreover, they establish a clear and predictable legal structure for managing fund liquidity, empowering managers with a robust toolkit to handle redemption pressures while safeguarding the interests of all fund investors.

the core objective of rts on lmts governing aifms and ucits is to provide them with a standardised set of instruments to manage liquidity risk effectively, thereby protecting investors and containing potential spillover effects in the market. these rts will apply from 16 april 2026. alternative investment funds (aifs) constituted before this date are granted a transitional period until 16 april 2027 to comply.

key features of these rts on lmts include:

• suspension of subscriptions, repurchases and redemptions: an aifm or ucits must suspend subscriptions, repurchases, and redemptions simultaneously and for the same duration. this measure is intended to be temporary and is applied only in exceptional circumstances where it is in the best interests of investors.
• redemption gates: aifms or ucits are permitted to activate redemption gates once a predetermined activation threshold is met.
• extension of notice periods: the rts allows aifms or ucits to extend the notice period required for redemptions.
• redemption fees: redemption fees must consider the estimated explicit transaction costs and where appropriate the implicit ones and any important market impact of asset sales.
• swing pricing: the rts provide that swing pricing could be applied in case of a difference between redemption and subscription orders or in a case where the difference would exceed a predefined activation threshold.
• dual pricing: provides calculation methods in cases where the aifm or ucits activates dual pricing.
• anti-dilution levies: must include estimated explicit transaction costs and where relevant the implicit transaction costs and any significant market impact of asset sales or purchases.
• redemption in kind: corresponds to the transfer of assets that the aif or ucits holds for the purpose of redeeming investors instead of cash.
• side pockets: these new rts provide the forms that side pockets can take, input with respect to their share class and the activation of a side pocket.

the new rts on lmts governing aifms can be found here

the new rts on lmts governing ucits can be found here

on 24 february 2026, the european securities and markets authority (esma) issued a statement reminding firms of their obligations under the national product intervention measures for contracts for differences (cfds). this follows an increase in the offering of derivatives, such as perpetual futures or contracts, which provide leveraged exposure to assets, including cryptocurrencies like bitcoin.

key points include:

• scope of measures: derivatives meeting the definition of cfds are subject to product intervention measures, including:
  • leverage limits
  • mandatory risk warnings
  • margin close-out and negative balance protection
  • prohibition of monetary and non-monetary benefits
• product governance: firms must ensure a narrow target market for these complex products, avoiding mass marketing or campaigns targeting inexperienced investors.
• appropriateness assessment: for non-advised services, firms must assess whether these products are suitable for retail clients.
• conflict of interest: firms must identify and manage conflicts of interest, particularly when derivatives are issued or traded within the same group.
• legal analysis: firms must conduct a thorough legal review of products, regardless of their commercial name, to determine if they fall under the scope of these measures.
• priips regulation: firms distributing these derivatives to retail clients must prepare a key information document (kid) as required under the priips regulation.

esma emphasises the importance of acting in the best interests of clients and adhering to investor protection requirements under mifid ii. firms should align their practices with these obligations to ensure compliance and safeguard retail investors.

esma’s news release can be found here and the public statement here

on 19 february 2026, the bermuda monetary authority (bma) announced a new initiative aimed at reducing regulatory burdens while enhancing policyholder outcomes. this effort focusses on streamlining insurance supervision by eliminating unnecessary costs, duplication and inefficiencies in reporting and compliance processes while maintaining robust prudential standards, strong governance expectations and effective risk-based supervision. key measures include:

• streamlined reporting: consolidating duplicative filings, aligning definitions and adopting a "collect once, reuse many times" approach to improve data reliability and reduce reconciliation efforts. implementing pre-submission validation to reduce avoidable rework.
• enhanced digital processes: leveraging the secure electronic portal for submissions, tracking and communication to improve efficiency and transparency.
• proportional supervision: tailoring regulatory expectations to insurers' specific risk profiles, ensuring resources are focused on material risks.

the initiative does not compromise prudential standards or supervisory effectiveness. the bma encourages insurers and stakeholders to actively engage, provide feedback and collaborate on simplifying processes while ensuring strong policyholder protections.

for more information bma’s notice can be found here

the european union (eu) and the united kingdom (uk) proceeded with the announced reduction in the price cap for russian-origin crude oil to us$44.10 per barrel, effective 1 february 2026. this measure, part of ongoing sanctions under regulation (eu) 833/2014, aims to curtail russia's revenue streams while ensuring global energy market stability.

key updates:

1. revised price cap:
   • the new cap of us$44.10 per barrel is in effect from 1 february 2026.
   • contracts concluded before 31 january 2026, with russian oil offloaded at the port of destination by 16 april 2026, will remain subject to the previous cap of us$47.60 per barrel.
2. uk general licence amendment:
   • the uk’s general licence int/2024/4423849, known as the ‘oil price cap’ licence, has been updated to reflect the new cap.
   • the office of financial sanctions implementation (ofsi) has amended faqs 154-161 and its industry guidance to align with these changes.
3. compliance requirements:
   • operators must ensure oil is purchased at or below the cap.
   • mandatory attestations and itemised cost documentation for transactions involving russian oil will apply from february 2024.
   • eu operators are required to retain records for five years to demonstrate compliance.
4. scope of application:
   • the cap applies to russian seaborne crude oil and petroleum products.
   • exemptions exist for specific projects critical to energy security, such as the sakhalin-2 project, valid until 28 june 2026.
5. enforcement:
   • national authorities will oversee compliance and address violations.
   • red flags for circumvention include refusal to provide cost details or falsified attestations.

this coordinated effort by the eu and uk underscores their commitment to enforcing sanctions while mitigating disruptions to global energy markets.

european union’s publications can be found here, here and here.

ofsi's faqs can be accessed here. the updated oil price cap general licence is here and the ofsi’s full oil price cap guidance, click here.

on 3 march 2026, luxembourg adopted a new law amending the legislation of 17 december 2010 on collective investment undertakings and 12 july 2013 on alternative investment fund managers. this update transposes the eu directive 2024/927 (aifmd ii), modernising the regulatory framework for investment funds.

the law harmonises loan origination rules for funds, imposing risk retention requirements, introducing diversification limits, and restricting certain originate-to-distribute models. it also harmonises and formalises the availability and governance of liquidity management tools (lmt), such as side pockets, in line with aifmd ii. these measures aim to enhance investor protection while reinforcing luxembourg's appeal as a leading centre for alternative asset and private debt management.

the law will come into effect on 16 april 2026, with certain provisions postponed until 16 april 2027.

for more information (only in french) here

the uk parliament has a vested interest in ensuring compliance of sanctions in the overseas territories (ots) since the uk is responsible, under the un framework, for the application of sanctions in all places that the uk claims sovereignty. added to that, the uk sanctions and money laundering act 2018 (samla) formalised the post-brexit settlement on sanctions implementation in the ots (with the crown dependencies being subject to other equivalent arrangements).

parliament has, on an ongoing basis, issued its views on compliance with these requirements in briefing papers issued by the house of commons, the most recent dated 31 october 2025. this details the application of uk sanctions against russia within the uk's 14 overseas territories (ots). it also evaluates the progress toward implementing public registers of beneficial ownership, but that is for another blog.

this review offers essential insights into the legal framework and practical challenges of enforcing international sanctions and promoting financial transparency across the ots. in this blog we focus on the ots which we advise on: anguilla, bermuda, the british virgin islands and the cayman islands.

sanctions framework in the ots

the paper confirms what every ot sanctions lawyer already knows, that the primary legal instrument governing uk sanctions is samla. that uk government policy mandates that any sanctions regime, including the russia (sanctions) (eu exit) regulations 2019, must be given effect in the ots – which is formally extended through orders in council, such as the russia (sanctions) (overseas territories) order 2020. consequently, ots are legally required to apply the same sanctions as the uk.

key observations on sanctions and legislative developments

the document highlights several key findings and legislative actions:

• the full extent of russian assets located within the ots remains largely unknown. however, significant actions have been taken.
• as of 2024, the uk and ot governments reported that a total of £7 billion in accounts and assets had been frozen since 2022.
• in february 2022, transparency international uk identified approximately £830 million worth of property in the ots and crown dependencies linked to individuals close to the russian president or those accused of corruption.
• a november 2024 analysis suggested significant exports from ots to russia, valued at us$134 million in that year.

for more information, the house of commons research briefing can be accessed here

on 22 december 2025, the european banking authority (eba) issued updated guidelines amending the existing framework (eba/gl/2022/04) on the equivalence of confidentiality regimes. these amendments aim to ensure that third-country confidentiality and professional secrecy frameworks align with eu standards, which is a prerequisite for sharing confidential information with third-country authorities.

key highlights:

scope expansion: the eba has expanded the scope of its equivalence guidelines to create a more consistent framework for how eu national regulators cooperate with supervisory authorities in non-eu countries, the guidelines now incorporate confidentiality and professional secrecy provisions under regulation (eu) 2023/1114 (micar), which governs markets in crypto-assets. this includes updated definitions and scope for competent authorities engaging with third-country authorities.

equivalence assessments: the eba has evaluated and confirmed the equivalence of confidentiality regimes for several third-country authorities, including:

• australia: australian transaction reports and analysis centre (austrac)
• china: national financial regulatory administration (nfra)
• montenegro: central bank of montenegro
• peru: superintendency of bank, insurance, and pension fund administrators (sbs)
• serbia: national bank of serbia
• united kingdom: financial conduct authority (fca) and prudential regulation authority (pra)

legal framework updates: the guidelines reflect changes in third-country legal frameworks and align with micar requirements. they also clarify that these assessments do not address the need for cooperation arrangements or participation in supervisory colleges.

the guidelines will be translated into all official eu languages and published on the eba website. competent authorities must report compliance within two months of publication, with the guidelines becoming effective shortly thereafter.

the press release can be found here and the final report here

on 23 february 2026, esma clarified the application of mifid ii remuneration rules to tied agents under article 27 of regulation (eu) 2017/565. key points include:

1. balance between fixed and variable remuneration: tied agents are classified as "relevant persons" under article 2(1) of delegated regulation 2017/565. consequently, firms must ensure a balance between fixed and variable remuneration. however, recital 41 allows flexibility, permitting a larger variable component for tied agents, provided it aligns with national laws and does not compromise client interests.
2. national exemptions under article 3 of mifid ii: member states adopting the optional exemption under article 3 must impose analogous requirements, including remuneration rules, to ensure compliance with article 27 of regulation (eu) 2017/565.

this guidance emphasises the need for firms to consider tied agents' unique status and national specificities while maintaining policies that prioritize client interests.

esma’s response can be found here

on 21 january 2026, the cyprus securities and exchange commission (cysec) issued a press release highlighting its strengthened financial market oversight in 2025 and its strategic priorities for 2026, focussing on investor protection, transparency, and financial sector resilience, as cyprus assumes the eu presidency. key achievements include:

• eu presidency role: active participation in european legislative initiatives, including the market infrastructure package and sustainable finance disclosure regulation (sfdr), ahead of cyprus’ eu presidency in 2026. cysec will also host the esma management board and board of supervisors meetings in april 2026.
• supervisory actions: conducted 600 inspections, imposed eur 2.3 million in fines, and addressed compliance issues in over 170 cases. efforts targeted professional conduct, sustainability risks, and anti-money laundering (aml) measures. even more, cysec actively participates in the preparation of the new european aml authority (amla) and in implementing the new national sanctions framework through the national sanctions implementation unit (nsiu).
• development and digital transformation:47 new licenses were granted in 2025. assets under management in collective investment schemes rose to eur 11.4 billion, with a substantial share directed to the cypriot economy. investments in it systems, ai, and cybersecurity, alongside plans to enhance human resources are being prepared in 2026.
• investor protection: issued warnings against unauthorised entities and promoted financial literacy through educational campaigns to encourage safe participation in the digital financial landscape.

the press release can be found here

on 9 february 2026, the cayman islands government published three legislative instruments: the mutual funds (amendment) bill, private funds (amendment) bill, and virtual asset (service providers) (amendment) bill. these were created to answer a number of pressing questions arising from tokenised investment funds and to establish a clear and reliable regulatory framework for tokenised investment funds.

‘tokenisation’ means using blockchain or similar technology to digitally represent an investor's equity or interest in a fund, usually while maintaining a traditional position with respect to legal ownership and rights.

the new framework created by the three proposed instruments aims to provide clear and unambiguous guidance and address previous uncertainties as to whether funds that are tokenised are still regulated under existing fund laws, such as the mutual funds act and private funds act, or whether they should be treated as regulated under the virtual asset (service providers) (vasp) act due to the tokenisation of interests in the funds.

key updates include:

• definitions for digital equity and investment tokens.
• enhanced recordkeeping and transferability provisions.
• disclosure of technology-specific risks.
• expanded supervisory powers for the cayman islands monetary authority (cima).

the virtual asset (service providers) (vasp) act has also been clarified to exclude regulated tokenised funds from being classified as virtual asset issuers, unless they provide virtual asset services like exchange or custody.

these amendments reinforce the cayman islands' position as a leader in financial services innovation, ensuring technological advancements occur within a transparent and internationally credible regulatory environment.

the official press release can be found here

mutual funds (amendment) bill, 2026 can be accessed here

the private funds (amendment) bill, 2026 can be accessed here

the virtual asset (service providers) (amendment) bill, 2026 can be accessed here

on 15 december 2025, cyprus and vietnam signed a double tax treaty aimed at avoiding double taxation and preventing fiscal evasion concerning taxes on income (cyprus-vietnam dtt).

the cyprus-vietnam dtt, aligns with international tax standards, including the organisation for economic co-operation and development (oecd) and united nations model conventions (un model).

we provide below key articles included in the cyprus-vietnam dtt:

key provisions

1. permanent establishment (pe)

key provisions on pe include:

• construction projects lasting at least 6 months.
• furnishing of services for at least 6 months within a 12-month period.
• exploration/exploitation of natural resources (no time threshold).

2. dividends, interest, royalties

key provisions on dividends, interest and royalties include:

• dividends -
• • maximum 5 per cent tax if the beneficial owner (bo) is a company holding at least 70 per cent of the paying company’s capital or has invested at least usd 10 million.
  • otherwise, capped at 10 per cent tax.
• interest - maximum 10 per cent tax on the gross amount of interest.
• royalties - maximum 10 per cent tax on gross amount of royalties.

3. capital gains tax (cgt)

key provisions on cgt include:

• the country of origin retains the right to tax gains from shares in property-rich companies.
• gains from shares representing over 15 per cent of a company’s capital may also be taxed by the country of origin.

4. methods of eliminating double taxation

• the cyprus-vietnam dtt sets out specific provisions regarding the methods applied by each contracting state to eliminate double taxation.

benefits for businesses and investors

the cyprus-vietnam dtt provides clarity and stability in the tax treatment of transactions between the two countries, ensuring fair treatment while preventing tax evasion and double taxation. by safeguarding transparent tax practices, the cyprus-vietnam dtt enhances investor confidence and supports the development of stronger trade and economic ties between cyprus and vietnam.

the official press release regarding the cyprus – vietnam dtt can be found here

the cyprus-vietnam dtt (available in greek, vietnamese and english) can be found here

effective date: 1 january 2026

this guide outlines the critical amendments to the cayman islands’ common reporting standard (crs) regulations, introduced by the tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025, here. these changes represent a significant shift in the compliance landscape, aligning the jurisdiction with global oecd standards and the new crypto-asset reporting framework (carf).

as these amendments are directly relevant to our practice, it is essential that we understand the new timelines, expanded scope, and procedural requirements to advise our clients effectively.

1. new deadlines for registration and reporting

one of the most immediate impacts for our clients is the consolidation and advancement of compliance deadlines. the previous split deadlines for returns and compliance forms have been harmonised to streamline the process.

registration for new fis

• new deadline: entities that become financial institutions (fis) on or after 1 january 2026 must register on the ditc portal by 31 january of the following year (i.e. 31 january 2027 onwards).

annual reporting deadlines

• consolidated date: from the 2026 reporting year onwards, both the crs return and the crs compliance form are due by 30 june annually.
• impact: this replaces the previous separate deadlines (31 july for returns and 15 september for compliance forms).
• first filing: for the 2026 reporting period, both documents must be submitted by 30 june 2027.

2. principal point of contact (ppoc) requirements

a major procedural change is the stricter requirement regarding the ppoc. the ditc now mandates that the ppoc must have a physical presence within the jurisdiction.

• requirement: every cayman fi must appoint a ppoc person (natural or legal) located in the cayman islands.
• address: the ppoc must have a physical address in the cayman islands; a mailing address alone is insufficient.
• deadlines for compliance:
  • new fis (from 1 jan 2026): must appoint a cayman-based ppoc immediately upon registration.
  • existing fis (registered before 31 december 2025): have a transitional period until 31 january 2027 to appoint a local ppoc and update their details on the ditc portal. note: this deadline was extended from the original 1 january 2027 date.
• notification: any changes to the ppoc must be notified to the ditc within 30 days.

3. expanded scope: crypto-assets and digital money

to modernise the framework, the definition of "financial assets" has been significantly broadened. this change ensures that the cayman islands' regime captures digital assets, mirroring the oecd’s crypto-asset reporting framework (carf).

new inclusions

the regulations now formally include:

• crypto-assets: this covers payment tokens (e.g., bitcoin, stablecoins), utility tokens, certain nfts, and security tokens.
• specified electronic money products.
• central bank digital currencies.

client impact

entities dealing in these assets must re-evaluate their classification to consider whether they now fall under the definition of an fi or have new reporting obligations regarding account holders holding these assets. due diligence procedures for both new and existing fis must be updated to capture and report on these asset types effectively.

4. enhanced data collection and enforcement

the amendments introduce more granular data requirements and a stricter penalty regime.

data requirements

• controlling persons: fis must collect and report additional information regarding controlling persons, i.e. any natural person who exercises control over an entity.
• account classifications: there is a requirement for more detailed account classification data.
• self-certifications: valid self-certifications are critical. they must be collected from users to determine tax residency by 1 january 2027 for pre-existing accounts, and prior to (or upon) establishing a relationship for new accounts.

enforcement and penalties

• immediate penalties: the ditc has the authority to impose administrative penalties immediately for non-compliance, removing the previous "breach notice" buffer.
• penalty amounts: failure to file returns or update ppoc details can result in penalties of up to us$12,200 (ci$10,000) per breach.
• scope: penalties apply to missed filing deadlines, failure to maintain current registration details, and failure to establish valid self-certifications.

5. transitional provisions summary

to assist in managing client expectations, here is the timeline for the transition:

6. cima prudential information survey for registered persons

in addition to the crs amendments, registered persons should be aware of new regulatory obligations introduced by the cayman islands monetary authority (cima). the prudential information survey (adr-046-75-02) is now required for entities registered as registered persons and is a critical part of cima’s ongoing supervisory and risk assessment objectives.

purpose and scope

• the survey aims to enhance cima’s oversight of the securities investment business sector, focussing on activities, exposures, and risk profiles across registered persons.
• it is separate from, and in addition to, existing requirements such as the annual declaration.

key deadlines

• the first prudential information survey covers the reporting period from 1 january 2025 to 31 december 2025.
• submission is required via the reefs portal between 1 january 2026 and 31 march 2026.

submission requirements

• registered persons must accurately complete and submit the survey within the specified window.
• the guidance for registered person prudential information survey is available and should be consulted for technical and procedural details.
• timely submission is mandatory. this obligation is in addition to the annual declaration (adr-046-75), which remains due from 1 january 2026 to 15 january 2026.

failure to meet either obligation may result in regulatory follow-up and penalties. any queries are to be directed to the securities supervision division at cima.

action points for the team

1. review client portfolios: identify clients dealing in digital assets who may now fall under the expanded scope.
2. audit ppoc appointments: ensure all existing fi clients have a plan to appoint a cayman-based ppoc before the january 2027 deadline.
3. update compliance calendars: adjust internal tracking systems to reflect the new 30 june consolidated deadline for 2027.

on 24 february 2026, the united kingdom government announced its most extensive package of sanctions against the russian federation since 2022. published by the foreign, commonwealth & development office, this package comprises nearly 300 new designations targeting critical russian revenue streams, energy infrastructure and military supply chains.

energy sector targets and key measures

the centrepiece of these new measures is the designation of pjsc transneft, one of the world's largest oil pipeline companies, reportedly responsible for transporting over 80 per cent of russian oil exports.

the uk has also sanctioned:

• the '2rivers' oil network: 175 companies within this network have been designated. it is described as one of the largest shadow fleet operators globally and a major trader of russian crude oil.
• shadow fleet vessels: a further 48 oil tankers alleged to be involved in the illicit transportation of russian oil have been designated.

broadening the scope: additional designations

beyond the energy sector, the measures extend to several other critical areas to disrupt russia's war capability:

• military supply chains: 49 entities and individuals designated for sustaining russia's war machine, including international suppliers of goods and technology for drones.
• civil nuclear energy: 3 companies and 2 individuals sanctioned for attempts to secure contracts for new russian nuclear installations overseas.
• liquified natural gas (lng): 6 targets in the lng industry, including ships and key export terminals responsible for exporting russian lng.
• financial sector: 9 russian banks sanctioned for processing cross-border payments.

in parallel, the uk foreign secretary, during a visit to ukraine, announced a £30 million support package for ukraine. this funding is allocated to repair energy infrastructure and to support justice and accountability initiatives.

this latest package brings the total number of individuals, businesses and ships sanctioned under the uk's russia regime to over 3,000, while total uk support to ukraine since the start of the conflict now stands at £21.8 billion.

the press release can be found here

on 18 february 2026, the luxembourg registration duty, estate and vat authority (aed) issued an important reminder for all reserved alternative investment funds (raifs). in its capacity, as the supervisory authority for aml/cft matters, the aed requires the timely submission of the annual rc (responsable du contrôle) report for the year 2025.

the deadline for filing this mandatory report is 31 may 2026.

this synthesis report details the raif's aml/cft activities and operations as of 31 december 2025. it must provide a comprehensive overview, including:

• risk assessments for aml/ft, mitigation measures and risk tolerance levels.
• results of due diligence on clients, initiators, portfolio managers and other key parties.
• statistics on suspicious transaction reports filed with the crf.
• details on the monitoring of financial sanctions and blocked positions.

for more information, including detailed submission instructions, please find the press release here.

ensure your organisation is prepared to meet this regulatory deadline. contact our expert legal team for guidance on navigating your aml/cft compliance obligations.

the offshore regulatory landscape continues to evolve at a rapid pace, with regulatory bodies in the cayman islands and british virgin islands introducing updates that reflect the growing global demand for transparency and compliance. as we move into 2026, several critical considerations have emerged for offshore entities, particularly those with ties to the middle east. this article outlines five key areas that demand attention and offers practical insights for businesses seeking to stay ahead of the curve.

1. regulatory inspections – increased depth and frequency

both the cayman islands monetary authority (cima) and the bvi financial services commission (fsc) have significantly ramped up their inspection programmes for regulated financial institutions. the number of on-site visits has more than doubled year-on-year, with a strong emphasis on anti-money laundering (aml) compliance, corporate governance, and timely regulatory filings.

inspections are increasingly drilling into operational substance: is the board meeting regularly? are minutes properly documented? is the aml officer empowered and independent? for middle east-based businesses operating offshore structures, this means preparing for regulatory scrutiny at a granular level.

entities that conduct internal mock audits, maintain updated aml manuals, and rigorously document decision-making processes are best positioned to navigate these inspections with confidence. the message from regulators is clear: substance matters, and procedural compliance alone is no longer sufficient.

for more on cima inspections, see here.

for more on bvi and cayman inspections more generally, please see here.

2. anti-money laundering – heightened scrutiny across jurisdictions

aml compliance has moved firmly to the top of the regulatory agenda in both the cayman islands and the bvi. regulators are no longer satisfied with policies that exist only on paper; they expect to see evidence of active implementation, regular review, and genuine risk-based decision-making.

key areas of focus include:

• customer due diligence (cdd) and enhanced due diligence (edd): regulators are examining whether entities are applying appropriate levels of scrutiny to high-risk customers, including politically exposed persons (peps) and clients from higher-risk jurisdictions. for middle east-connected structures, this often means demonstrating robust source of funds and source of wealth verification.
• ongoing monitoring: static onboarding checks are insufficient. both cima and the fsc expect continuous transaction monitoring and periodic customer reviews, particularly for long-standing relationships where risk profiles may have evolved.
• suspicious activity reporting: entities must demonstrate that staff are trained to identify red flags and that there are clear internal escalation procedures. failure to file suspicious activity reports (sars) when warranted, or filing them late, is a common inspection finding.
• aml officer independence and empowerment: inspectors frequently probe whether the designated aml compliance officer and money laundering reporting officer have genuine authority, sufficient resources, and direct access to the board. nominal appointments without operational backing are increasingly being called out.
• third-party reliance and group-wide policies: where entities rely on introducers or group aml frameworks, regulators expect clear contractual arrangements, documented due diligence on the third party, and evidence that reliance is appropriate given the risk profile.

for middle east businesses, the interconnected nature of regional financial networks and the prevalence of complex ownership structures-means aml compliance requires particular attention. entities should conduct independent aml audits, refresh policies to reflect current regulatory expectations, and ensure staff training is up to date and properly documented.

3. aeoi enforcement – the compliance net tightens

automatic exchange of information (aeoi), including fatca and crs, has moved from framework-building into strict enforcement. in 2024, the oecd flagged over 30 per cent of participating jurisdictions for data quality issues. the cayman islands and bvi authorities are under pressure to demonstrate real oversight.

middle east clients face mounting risks from inaccurate or incomplete aeoi reporting. common failures include:

• misclassification of financial institutions
• late or missed reporting deadlines
• lack of valid tins or self-certifications
• lack of adequate training of staff

tax authorities in both jurisdictions are now ramping up inspections on crs compliance measures a development that financial institutions must adequately provision for. we recommend clients invest in their compliance systems and conduct periodic aeoi reviews, especially where underlying accounts are booked with regional banks or administered through complex holding structures.

4. economic substance – a timely reminder

while economic substance laws in the cayman islands and bvi have been in force for several years, enforcement has matured significantly. both jurisdictions are now actively enforcing economic substance rules, with fines potentially exceeding us$100,000. beyond monetary penalties, failure to meet economic substance requirements could result in the loss of good standing, reputational damage, and even the strike-off of entities.

common pain points include:

• passive holding companies with minimal board activity
• outsourced directorships with no regional oversight
• failure to evidence “directed and managed” test

middle east businesses should treat economic substance as more than a checkbox — it’s now a live issue which should be monitored.

5. beneficial ownership – from shadow to spotlight

transparency around beneficial ownership has become a cornerstone of global regulatory reform, and both the cayman islands and the bvi have established robust regimes.

cayman islands: the jurisdiction introduced a beneficial ownership regime on 1 july 2017, requiring all in-scope entities to maintain a confidential register. the beneficial ownership transparency act, 2023, which became effective on 31 july 2024, expanded the scope and tightened disclosure rules, with formal enforcement commencing in january 2025. access remains limited to designated authorities, including the financial reporting authority, the tax information authority, and law enforcement. while the jurisdiction has expressed support for a legitimate interest access model, no plans for a public register have been confirmed.

british virgin islands: the beneficial ownership secure search system (boss), launched in mid-2017, has now been operational for nearly nine years as a confidential national register. access is currently restricted to designated authorities under strict legal frameworks. while there is no current plan for a fully public register, the bvi is moving toward a 'legitimate interest' access regime in line with evolving global standards, expected to become fully operational by april 2026.

for gulf-based businesses, this shift means confidentiality can no longer equate to opacity. entities must ensure filings are timely and accurate, understand who qualifies as a "beneficial owner," and avoid nominee arrangements that obscure true control. handled well, ownership transparency builds credibility and pre-empts reputational risk.

final thoughts – strategy beats reaction

the regulatory temperature is rising, and middle eastern businesses using offshore structures must shift from reactive compliance to proactive governance. those who invest now in legal clarity, operational readiness, and advisory support will not just survive the current environment; they will lead.

at harneys, we work with clients across the globe to future-proof their structures in an increasingly interconnected regulatory world. if any of these topics resonate with your business, we would be delighted to discuss how we can assist.

cyprus is taking decisive steps to reshape its employment landscape. the government is currently advancing a draft bill to transpose directive (eu) 2022/2041 on adequate minimum wages into national law. as one of the few member states yet to fully adopt the directive, the push to pass the "adequate minimum wages law of 2025" brings significant changes for businesses and workers alike. we outline the critical provisions of this draft bill, how it aligns with european standards, and what it means for your operations.

key provisions of the draft bill

the new legislative framework introduces several mechanisms designed to ensure a decent standard of living, reduce in-work poverty, promote social cohesion and social convergence upwards and to reduce the gender pay gap. if you operate a business in cyprus, you need to prepare for the following core changes:

• the minimum wage adjustment committee: the government will appoint a dedicated committee comprising worker representatives, employer representatives, and independent academic experts. this body will assess and recommend minimum wage adjustments based on the cost of living, productivity, and economic growth.
• clear assessment benchmarks: to guide these adjustments, the bill references internationally recognised indicators. these include setting the minimum wage at 60 per cent of the gross median wage and 50 per cent of the gross average wage.
• strict public procurement rules: the law ties public contracts to wage compliance. companies bidding for public sector projects must ensure that they, and their subcontractors, comply with applicable collective agreements. a previous conviction for wage violations will bar a company from submitting public bids for three years.
• enhanced data collection: employers will face new reporting obligations. you will need to register specific wage and employment data into a designated digital system to help the government monitor compliance and report back to the european commission.
• promoting collective bargaining: if collective bargaining coverage falls below 80 per cent of the workforce, the state must establish a clear action plan to promote and expand it, protecting trade union members from discrimination.

changes to the existing minimum wage regime

until now, the determination of the minimum salary in cyprus has followed the provisions of the minimum wage law, cap. 183, as amended. under this regime, the minister of labour issued a decree pursuant to which the national minimum salary was set and periodically reviewed, with the current minimum monthly wage standing at eur 979 (eur 1,088 following completion of 6 months of continuous employment).

this framework is now set for fundamental change: the new bill provides that the minimum statutory wage will instead be determined by a decree of the council of ministers, with a mandatory readjustment mechanism taking effect at two-year intervals. this marks a shift from ministerial discretion to a more institutionalised and predictable adjustment process.

scope of application

the bill provides for comprehensive employee coverage. it applies to all individuals working in the republic of cyprus under a contract of employment or any employment relationship, regardless of sector, unless they fall within a category of employers or economic activity that is expressly exempted by decree. this approach not only ensures broad protection for employees/workers but also sets a clear legal baseline for employers.

offences and related penalties: clauses 21, 22, and 24

compliance is underscored by a series of offences and penalties under the bill:

• clause 21: offenses and penalties
  this clause outlines offenses related to obstructing labour inspectors, providing false information, or failing to present required documents. penalties include imprisonment of up to three (3) months, a fine of up to €3,000, or both. however, there is a discrepancy in the monetary fine mentioned in the clause text, which states "€3,000" in one part and "€5,000" in another.

• clause 22: employer liability
  employers are held accountable for offenses committed by their representatives or other persons acting on their behalf. if an employer demonstrates due diligence and proves the offence occurred without their knowledge or consent, they may avoid penalties, provided the representative or other person is convicted. in cases where an employee is indirectly employed (e.g., through a subcontractor), the primary employer may also be held jointly liable for ensuring compliance with minimum wage requirements.

• clause 24: sanctions
  employers violating the provisions of the law face imprisonment of up to two years, a fine of up to €10,000, or both. additional fines of €50 per day may apply for continued violations after conviction. courts may also order employers to pay outstanding wages owed to employees, calculated based on the statutory minimum wage.

repeal of previous legislation

it is important to note that upon the enactment of the new law, cap. 183 and all ministerial decrees issued under it will be expressly repealed. this consolidates the statutory framework into a single, modern instrument and eliminates potential conflicts or overlaps with previous regimes.

alignment with the directive and notable variations

the draft bill strongly aligns with the core objective of directive (eu) 2022/2041: promoting collective bargaining and ensuring statutory minimum wages are adequate. recent european court of justice case law, such as case c-19/23, highlights the european union's strict approach to worker protection and the necessity of transparent, predictable employment conditions. the cyprus bill reflects this rigorous standard.

however, variations between the eu directive and the local draft bill have surfaced, sparking debate. the most notable point of friction involves the indicative reference values. while the eu directive presents the 60 per cent median and 50 per cent average wage figures as non-binding recommendations, local employer groups argue the draft bill embeds them too rigidly. furthermore, the mandatory data collection requirements go beyond the direct scope of the directive, introducing local administrative layers that duplicate existing digital reporting systems.

reactions from employers and unions

are these changes a necessary step for social convergence, or do they represent burdensome overregulation? the social partners in cyprus hold distinctly different views.

employers and business chambers warn against the unilateral expansion of obligations. they argue that the data collection mandates will create severe administrative burdens without directly serving the directive's goals. furthermore, employers advocate for maintaining the flexibility of the existing national minimum wage law, which they believe allows for smoother adaptation to the specific economic realities of cyprus through structured social dialogue.

conversely, trade unions broadly welcome the reform. they view the bill as a vital tool to enforce decent working conditions and close the gender pay gap. their primary request is for further clarification to ensure that statutory minimum wages encompass the minimum entry pay rates already agreed upon in sectoral collective agreements.

implications for your business

the transposition of directive (eu) 2022/2041 signals a shift towards stricter labour market regulation and enhanced worker protections in cyprus. for businesses, this means wage-setting will become a more structured, data-driven process overseen by a tripartite committee. you must prepare for increased administrative responsibilities regarding data reporting. additionally, if your business relies on public sector contracts, strict adherence to collective agreements and wage laws is no longer just good practice, it is a mandatory condition for participation.

understanding these regulatory shifts is essential for maintaining compliance and securing your competitive edge.

the draft bill transposing the directive is here

the directive (eu) 2022/2041 can be found here

ecj caselaw c-19/23 can be accessed here

the luxembourg special limited partnership (scsp) has become the go-to vehicle for private equity, venture capital, and real estate funds. it offers flexibility, tax efficiency, and minimal regulatory hassle, but only if you structure it correctly. get it wrong, and you could face serious regulatory consequences.

what is an scsp?

introduced in 2013, the scsp is luxembourg's answer to the anglo-saxon limited partnership. it operates without direct regulatory supervision and offers maximum contractual freedom to design your own investment structure.

key features at a glance

no legal personality - the scsp does not constitute a legal entity distinct from that of its partners. this is familiar territory for investors used to common law limited partnerships.

partner structure - at least one general partner with unlimited liability (typically a limited liability company to contain risk) and one or more limited partners whose exposure is capped at their capital commitment.

maximum flexibility - the partnership agreement governs almost everything: profit sharing, governance, transfers, carried interest, waterfalls, and more. you design the structure you need.

formation and registration

the scsp may be established by a private agreement (sous seing privé), without the need for a notarial deed. the partnership agreement must be registered with the luxembourg trade and companies register (registre de commerce et des sociétés) and must contain certain mandatory particulars, including the name of the partnership, its registered office, the identity of the partners, the purpose of the partnership, the duration (which may be limited or unlimited), and the contributions of each partner. the scsp must include the designation "scsp" or "société en commandite spéciale" in its name.

management and governance

the general partner is responsible for the management and representation of the scsp. limited partners may not participate in the management of the partnership; any involvement in management activities may result in the loss of their limited liability status. however, limited partners may exercise certain supervisory, advisory, and consent rights without jeopardising their limited liability, provided these rights do not extend to day-to-day management.

tax treatment

the scsp is, in principle, treated as fiscally transparent for luxembourg direct tax purposes, meaning that the partnership itself is not subject to corporate income tax or municipal business tax. instead, income and gains are attributed to the partners and taxed at their level according to their respective tax status and residence. this transparency makes the scsp particularly attractive for international investors seeking to avoid double taxation and to benefit from tax treaties applicable in their home jurisdictions.

the scsp is also generally treated as a partnership (rather than a corporation) for the purposes of the tax laws of most other jurisdictions, though investors should confirm the treatment in their home jurisdiction on a case-by-case basis.

structuring outside the scope of aifmd

a key consideration when establishing an scsp is whether the structure falls within the scope of the alternative investment fund managers directive (aifmd). if an scsp qualifies as an alternative investment fund (aif) under aifmd, its manager (aifm) must either be authorised by the cssf or register under the partial exemption.

the core test - aifmd applies to collective investment undertakings that (1) raise capital from multiple investors, (2) invest according to a defined investment policy, and (3) do so for the benefit of those investors. structures that fail any limb of this test fall outside aifmd entirely.

de minimis thresholds - even if the scsp qualifies as an aif, its manager (gp) may escape full authorisation if assets under management stay below eur 100 million (with leverage) or eur 500 million (no leverage, no redemption rights for five years). registration with the cssf is still required, but not full authorisation.

why legal advice is essential - the availability of these carve-outs is highly fact-specific. get it wrong, and the consequences are serious: enforcement action, reputational damage, and potential liability for the general partner. legal advice should be obtained at the outset to assess aifmd scope, identify the appropriate carve-out, and ensure the partnership agreement supports the intended regulatory position. ongoing monitoring is also critical: changes to investors, strategy, or aum may alter the analysis.

practical considerations

while the scsp offers considerable advantages, certain practical considerations should be borne in mind when establishing and operating the structure.

investor profile - the scsp may not be suitable for all investor profiles. institutional investors subject to regulatory constraints may require the additional protections afforded by regulated fund structures. the choice between an scsp and a regulated alternative should be made in light of the specific objectives, investor base, and regulatory considerations applicable to the proposed structure. additionally, the private placement regime in each jurisdiction of the investor should be considered, as there may be additional considerations.

anti-money laundering the applicable aml/ctf obligations for an scsp and the gp will depend on the final structure falling within the definition of an aif.

beneficial ownership register - the scsp is required to identify its beneficial owners and file this information with the luxembourg register of beneficial owners (registre des bénéficiaires effectifs). compliance with beneficial ownership reporting requirements is an ongoing obligation.

conclusion

the luxembourg scsp has established itself as a highly flexible and tax-efficient vehicle for a wide range of investment and holding structures. its contractual freedom, tax transparency, and absence of legal personality make it an attractive option for sponsors, fund managers, and investors seeking to establish bespoke arrangements in a well-regarded european jurisdiction. given the complexity of the regulatory landscape and the significant consequences of inadvertent non-compliance, sponsors and investors should engage experienced legal counsel at the earliest opportunity.

on 13 february 2026, the cayman islands monetary authority (cima) extended the deadline for settling outstanding balances related to revised annual fees for regulated mutual and private funds.

the new deadline is 15 march 2026, extended from the original 15 february 2026. penalties will be imposed after this date.

this extension allows stakeholders additional time to complete internal reconciliations, administrative processes, and payment arrangements. funds must ensure all outstanding fees are fully paid by the new deadline to avoid non-compliance penalties.

cima’s industry notice can be accessed here

on 4 february 2026, the cayman islands monetary authority (cima) published a notice to assist stakeholders in interpreting the revised fees for regulated mutual funds and private funds, effective 1 january 2026. these updates follow cima's earlier notice on 31 december 2025, which outlined broader fee adjustments across financial services to align with international standards and enhance administrative efficiency.

key fee revisions for funds:

• registered funds: annual fee increased from us$3,675 to us$4,125.
• master funds: annual fee increased from us$2,625 to us$3,075.
• sub-funds (mutual funds): fee increased from us$300 to us$750 per sub-fund.
• sub-funds and aivs (private funds): fee increased from us$300 to us$525 per sub-fund or aiv.

important details:

• fees for financial years ending on or before 31 december 2025 remain at pre-revised rates.
• for 2026, fees will be split into base and incremental amounts on the reefs portal.
• from 2027 onwards, they will appear as a single payment.
• the annual fee deadline remains 15 january each year. outstanding balances arising as a result of the revised fees must be settled by 15 march 2026 (previously the deadline was 15 february 2026, however the deadline has been extended as per the industry notice, available here).

cima’s industry notice can be found here

the central bank of cyprus (cbc) recently issued a statement highlighting the european banking authority’s (eba) no-action letter on the interplay between the directive (eu) 2015/2366 on payment services (psd2) and the regulation 1114/2023 on markets in crypto-assets (mica)

the no-action letter focusses on the licensing requirements for crypto-asset service providers (casps) offering services involving electronic money tokens (emts).

the no-action letter

in summary, the no-action letter emphasises that certain services relating to emts which the eba considers to be payment services under psd2.

these include:

• transfer of crypto-assets involving emts on behalf of clients
• custody and administration of emts, including custodial wallets functioning as payment accounts

at the same time, the eba considers certain services relating to emts to be exempt from the scope of psd2. these are:

• crypto-to-fiat exchanges
• crypto-to-crypto exchanges and
• intermediation in purchases of crypto-assets using emts

finally, the no-action letter provides for a transitional period ending on 2 march 2026, by which point casps providing payment services in relation to emts must apply for a psd2 licence or partner with an entity authorised under psd2.

subsequent guidance issued by the eba clarified that, subject to certain conditions, member state regulators may permit casps that manage to apply for a psd2 licence by 1 march 2026 to continue providing payment services in relation to emts to existing clients while their application is being assessed.

more details as to the no-action letter can be found in our previous posts here and here.

the cbc statement

based on the above, the cbc has requested casps to conduct a self-assessment on whether the crypto asset services offered qualify as payment services, as per the provisions of the no-action letter and are therefore subject to licensing from the cbc.

where a casp does need to be authorised by the cbc for the provision of payment services, the cbc has issued a dedicated application form for casps which can be accessed here.

finally, the cbc requests that casps already providing emt-related payment services should have applied for authorisation by 20 february 2026.

for more details cbc’s guidance can be accessed here

on 17 february 2026, the european union updated its list of non-cooperative jurisdictions for tax purposes.

the current list includes 10 jurisdictions:

american samoa, anguilla, guam, palau, panama, russia, turks and caicos islands, the united stated virgin islands (usvi), vanuatu, and vietnam.

these jurisdictions have not fully met eu tax cooperation standards and are urged to improve their legal frameworks to meet these requirements.

compared to the latest update from october 2025, fiji, samoa, and trinidad and tobago were removed from the list after addressing deficiencies, while vietnam and turks and caicos islands were added due to non-compliance with tax transparency and fair taxation standards.

additionally, the eu council acknowledged progress in its "state of play" document. this document reflects ongoing eu cooperation with its international partners and the commitments of these countries to reform their legislation to adhere to agreed tax good governance standards. seychelles and antigua and barbuda were removed from the state of play document after meeting international tax standards.

the eu continues to monitor listed jurisdictions and apply defensive tax measures where necessary.

the press release can be found here

on 12 february 2026, the european banking authority (eba) issued an opinion regarding the end of the transition period under its no-action letter on the interplay between directive 2015/2366 on payment services (psd2) and regulation 1114/2023 on markets in crypto-assets (mica).

the no-action letter focusses on the licensing requirements for crypto-asset service providers (casps) offering services involving electronic money tokens (emts).

key points include:

transition period guidance: the no-action letter advises national competent authorities (ncas) to permit casps that manage to apply for a psd2 licence by 1 march 2026 to continue providing payment services in relation to emts to existing clients while their application is being assessed.

in order to benefit from this exemption, the eba proposes a number of conditions, including the submission of a fully completed application, no negative regulatory history and adequate and timely responses on the part of the applicant as well as restrictions on marketing activity.

post-transition scenarios:

the eba acknowledges that three scenarios may apply in respect of a casp following 1 march 2026:

• casps fully compliant with psd2: casps authorised to provide payment services under psd2 may continue to provide services in relation to emt transactions or partner with a licensed payment service provider (psp).
• pending applications: casps that have already submitted a licensing application under psd2 may continue to provide services in relation to emt transactions to existing clients, subject to the conditions outlined above and in the guidance.
• non-compliant casps: casps that fail to submit an application or to meet the relevant conditions must cease providing emt-related payment services and offboard clients in the eu.

methods of partnering with psps:

finally, the eba mentions that a method for a casp to partner with a psp, may be for that casp to be appointed as the psp’s agent under psd2. however, in that case the eba also notes that member state regulators should also assess whether the psp itself would need to be authorised as a casp in that case.

for more information, the eba’s opinion can be found here and the eba’s no action letter can be found here.

the european securities and markets authority (esma), in october 2025, published its final draft regulatory technical standards (rts) for open-ended loan-originating alternative investment funds under the aifmd. these standards focused on liquidity management, stress testing and redemption policies for open-ended aifs.

key provisions include:

• liquidity management: aifms must ensure sufficient liquidity to meet redemption requests, considering factors like loan maturities, cash flows, and investor behaviour. the rts removed the earlier proposed requirement to hold a fixed proportion or “target amount” of liquid assets.
• stress testing: annual liquidity stress tests are mandatory, with higher frequencies required for specific fund characteristics.
• redemption policies: aifms must align redemption terms with the fund's liquidity profile and investment strategy.

the rts aim to synchronise practices across the eu, boosting investor protection and financial stability. the draft has been submitted to the european commission for adoption, with adoption not expected before 1 october 2027.

esma’s final report can be found here and here

on 16 february 2026, the uk government, through the office of financial sanctions implementation (ofsi), initiated a call for evidence on the implementation of the "ownership and control" (o&c) test within uk financial sanctions regulations. this initiative requests to gather insights from businesses, legal professionals and other stakeholders to evaluate the clarity, effectiveness, and proportionality of the current framework.

key objectives:

• understanding challenges: the o&c test aims to prevent sanctioned individuals or entities from circumventing sanctions through complex structures or proxies. however, industry feedback highlights challenges in assessing "hypothetical control", the potential ability of a designated person (dp) to influence an entity, even without active involvement. this ambiguity can lead to increased compliance costs, legal risks and operational delays.
• evaluating practical impacts: the call for evidence focuses on the practical difficulties of implementing the control test, particularly the hypothetical element, and its impact on compliance, business decisions and de-risking behaviours.
• exploring typologies of control: the government seeks input on the utility of control typologies, such as direct, indirect and hypothetical control, to improve the assessment process.

scope of the call for evidence:

the call for evidence focuses on three primary areas:

• the prevalence and nature of hypothetical control in sanctions cases.
• implementation challenges and associated costs.
• the practical utility of control typologies in compliance efforts.

stakeholders are invited to submit evidence, including anonymised case studies, by 13 april 2026.

the call for evidence and how to respond can be accessed here.

the uk government’s blog can be found here.

a significant legislative change is approaching for cyprus employers. the draft bill transposing the eu pay transparency directive (2023/970) into national law will soon usher in a new era of accountability for equal pay. with enforcement expected by 7 june 2026, businesses must begin preparations now.

this summary provides a high-level overview of the key changes, offering a glimpse into the comprehensive analysis detailed in our full article. are you ready to navigate this new landscape?

the core objective: enforcing equal pay

at its heart, the new legislation strengthens the principle of equal pay for equal work or work of equal value. it uses pay transparency and robust enforcement mechanisms to close the gender pay gap. the rules apply broadly, covering all sectors and employment types, including part-time, fixed-term, and agency workers.

the cyprus bill vs. the eu directive: key distinctions

while the cyprus bill implements the directive’s core requirements, it introduces a more prescriptive and stringent compliance framework in several areas. employers must be aware of these key distinctions:

• granular documentation: the bill requires employers to document not only their use of objective, gender-neutral job evaluation criteria (skills, effort, responsibility, and working conditions) but also how these criteria were weighted and agreed upon.
• retrospective data requests: upon request, employers must provide gender pay gap data for up to four previous years. this may require retrieving data from as far back as 2022.
• personal liability for directors: the bill introduces personal liability for directors and officers for offences, unless they can prove a lack of consent, complicity, or negligence.
• mandatory publication: while employers may choose whether to publish reports on their websites, the department of labour relations (the monitoring body) will publish comparable employer-level data, ensuring external scrutiny.

key employer obligations

the new requirements will transform the entire employment lifecycle. key obligations include:

• fair and transparent pay structures: employers must establish and maintain pay structures based on objective, gender-neutral, and weighted criteria for job evaluation.
• pre-employment transparency: job applicants must be informed of the initial pay or pay range before an interview. asking about salary history is banned.
• transparency of pay progression: the criteria for pay levels and progression must be documented and made accessible to employees.
• right to information: employees gain the right to request information on their individual pay and average pay levels for their category of work, broken down by gender.
• gender pay gap reporting: reporting requirements are staged by employer size, starting from 7 june 2027 for companies with 150+ employees.
• 250+ employees: annual reporting.
• 150-249 employees: triennial reporting.
• 100-149 employees: triennial reporting (from 7 june 2031).
• joint pay assessment: if a gender pay gap of 5 per cent or more is identified and cannot be justified, employers have six months to rectify it. failure triggers a mandatory joint pay assessment with employee representatives.

enforcement, protection, and penalties

a robust framework will enforce these new rules:

• shift of burden of proof: in any legal proceedings, the burden of proof will shift to the employer to demonstrate that no breach of equal pay rules has occurred.
• monitoring body & ombudsman: the department of labour relations will collect and publish data, while the ombudsman will handle individual complaints and discrimination claims.
• penalties: non-compliance can result in an offence which may corresponds to a fine up to €10,000 and / or imprisonment for up to six months. personal criminal liability may extent up the chain of command, including to directors and other officers.
• anti-victimisation: dismissing or disadvantaging an employee for exercising their rights under the bill is prohibited, with remedies including compensation for material loss and non-material harm, such as distress, which is without cap. this corresponds to a claim in a civil court and will be additional to any penalties imposed for a criminal offence,

practical steps for employer readiness

given the sweeping changes and approaching deadlines, employers should:

• review recruitment processes end-to-end: update pre-application and offer letter language and documentation, ensuring gender-neutral and non-discriminatory recruitment process, where pay ranges must be communicated clearly and salary history questions are removed from interview scripts.
• revise existing employment contracts: revise remuneration and pay-secrecy / confidentiality clauses, as applicable, to remove restrictions / prohibitions and to include nascent employee rights, including right to information.
• update policies and handbooks: establish matrices, procedures and strategy for defining a clear pay disclosure strategy, promotions / pay rises, reflecting pay transparency rights, request processes, and anti-retaliation guarantees. identify and codify strategy for consultations with employees / employee representatives as well as other pertinent communication protocols.
• identify and review of current compensation packages and establish weighted pay structures: map all roles / employee categories to objective, gender-neutral criteria and weightings; secure joint agreement with employee representatives, as required.
• systematise data: set up hr/payroll systems for four-year retrospective data extraction and reporting.
• hr training: train hr / recruiter staff and managers.
• conduct gdpr gap analysis: mitigate risks from increased transparency, particularly around data privacy and small categories.
• use the ergani system: leverage cyprus’ centralised digital platform for reporting and compliance.
• engage with remediation windows: ensure robust tracking of pay gaps and remediate proactively within the six-month period if gaps are detected.
• document governance: assign pay transparency oversight to board/leadership level and keep comprehensive compliance records.

conclusion

cyprus is set to implement one of the eu’s most demanding pay transparency regimes, setting a high bar for compliance, accountability, and governance. employers should treat these requirements as imminent and invest in robust, documented processes.

as the cypriot bill ushers in a new standard for pay transparency and equal pay compliance, organisations should consider preparation a strategic imperative. to support employers and hr leaders as the enforcement date approaches, we will publish a comprehensive guide with analysis and recommendations closer to the directive’s implementation, in early june.

for tailored guidance, reach out, our team stands ready to support your compliance journey.

the cypriot bill can be found here and the eu directive here

on 19 january 2026, the cyprus securities and exchange commission (cysec) issued circular c751, providing guidance to regulated entities on obligations under the digital operational resilience act (dora). key points include:

1. ict-related incident reporting: classification and reporting of major ict-related incidents

entities must ensure accurate classification and timely reporting of major ict-related incidents, adhering to the criteria in commission delegated regulation 2024/1772. figure 1 of circular c751 provides a helpful diagram indicating the approach for classifying major incidents under dora.

2. register of information: format of the submission

submissions must be in xbrl-csv format through the cysec xbrl portal, which can be accessed here, with annual deadlines of 28 february for data as of 31 december of the prior year.

3. ict risk management framework

entities must establish and maintain a documented ict risk management framework, reviewed annually or after major incidents. responsibilities for ict risk oversight must be independent, and internal audits should be conducted regularly by qualified auditors.

4. cysec portal: designation of ict auditor and responsible personnel

entities must designate the ict auditor responsible for the internal audit of the ict risk management framework and the person responsible for the control function in the cysec portal and can be found here.

for further details, circular c751 can be found here

at the end of last year, the european securities and markets authority (esma) issued a statement in relation to the technical specifications to support the smooth implementation of markets in crypto-assets (mica) standards. key highlights include:

• order book records: crypto-asset service providers (casps) operating trading platforms must maintain records in json format, adhering to iso 20022 methodology. effective from 3 april 2025.
• record-keeping: regardless of which casp produces a record, competent authorities should be able to uniformly perform analysis on all record databases, therefore guidelines on how information is kept and handed over by casps is provided.
• transparency requirements: standardised iso 20022 messages for data reporting will be available from 28 november 2025 to ensure consistency with thew maintained order book records.
• white papers: issuers, offerors, persons seeking admission to trading and casps operating trading platforms must prepare crypto-asset white papers in xhtml format using the extensible business reporting language (xbrl) taxonomy. applicable from 23 december 2025.
• identifiers: the technical schemas mentioned above must adhere to the following data standard requirements regarding identifiers. if no other eu-level identifiers are available, casps must identify legal-entity clients using legal entity identifier (lei) codes compliant with the iso 17442 standard and listed in the global lei database managed by the central operating unit under the lei regulatory oversight committee. likewise, when drafting crypto-asset white papers, casps and other preparers are required to identify each crypto-asset using a digital token identifier compliant with the iso 24165 standard.

these measures aim to improve transparency, ensure consistency, and facilitate market surveillance across the crypto-asset ecosystem.

esma’s statement can be accessed here

recent amendments to the cayman islands' common reporting standard (crs) regime have taken effect, introducing significant changes for financial institutions (fis). these updates, which align the cayman islands with the oecd's global standards, impact everything from compliance deadlines to the scope of reportable assets and have taken effect from 1 january 2026.

new principal point of contact (ppc) requirement

a key change introduced by the amendments is the mandate for every cayman financial institution to appoint a ppc located within the cayman islands. this ensures the department for international tax cooperation (ditc) has a local contact for all communications.

• transition period: fis registered before 31 december 2025 have until 1 january 2027 to appoint a cayman-based ppc.
• notification of changes: you must notify the ditc of any change to your appointed ppc within 30 days.
• penalty for non-compliance: failure to appoint a cayman-based ppc or notify the ditc of changes can result in administrative penalties of up to us$12,200 (ci$10,000).

revised filing and registration deadlines

the compliance calendar is shifting. beginning with the 2026 reporting year, the deadlines for submitting key crs documentation will be consolidated and brought forward. this harmonisation is designed to streamline the reporting process.

• new consolidated deadline: from 2026 onwards, both the crs return and the crs compliance form will be due by 30 june this replaces the previous separate deadlines of 31 july and 15 september.
• first consolidated filing: for the 2026 reporting period, both documents must be submitted by 30 june 2027.

registration deadlines for new entities have also been updated.

• new fis: financial institutions that commence activities on or after 1 january 2026, are required to complete their registration on the ditc portal by 31 january 2027.

stricter penalties and enforcement

the amended regulations introduce a more stringent enforcement regime. the ditc now has the authority to impose immediate penalties for non-compliance, removing the previous practice of issuing a "breach notice" before acting.

an fi that fails to file its crs return and/or crs compliance form by the statutory deadlines may be subject to immediate penalties of up to us$12,200 per breach. this also applies to the failure to keep registration details, such as the ppc and authorising person, current on the ditc portal.

expanded scope: digital and crypto-assets

in a significant move to modernise the crs framework, the definition of "financial assets" has been expanded. this change brings the cayman islands' regime in line with the oecd’s crypto-asset reporting framework (carf).

the regulations now formally recognise and include:

• crypto-assets
• specified electronic money products
• central bank digital currencies

entities dealing with these digital assets must now carefully evaluate their operations to determine if they have new or enhanced crs obligations. this includes reviewing due diligence procedures and reporting capabilities to ensure they can capture and report on these newly included asset types.

your guide to key compliance dates

to help you manage this transition, here is a summary of the most important dates:

• 1 january 2026: the amended crs regulations officially come into force. new fis must appoint a cayman-based principal point of contact from this date.
• 30 june 2027: first filing deadline under the new, consolidated schedule for the 2026 reporting year.
• 1 january 2027: deadline for existing fis to appoint a cayman-based principal point of contact.
• 31 january 2027: registration deadline for new fis that launched from 1 january 2026.

these amendments represent a significant step in the evolution of the cayman islands' tax transparency framework. we provide expert, efficient, and cost-effective services to guide you through these changes.

on 19 november 2025, the european commission unveiled its digital omnibus as part of a broader digital package, a major initiative to simplify and streamline complex eu digital rules on data, ai cybersecurity and more. this initiative is expected to foster innovation and reduce administrative burdens for businesses by saving up to billions in administrative costs annually while maintaining high standards of data protection, cybersecurity and fairness.

key components of the digital omnibus

• streamlined ai rules: the package introduces innovation-friendly amendments to the ai act, such as the simplified rules currently available for small and medium-sized enterprise (smes) being extended to small mid-cap companies, saving an estimated €225 million annually.
• simplified cybersecurity reporting: a new single-entry point for incident reporting will significantly reduce duplication and complexity. by consolidating obligations under laws such as network and information systems directive (nis2 directive) and the gdpr, the reporting burden for businesses is expected to be cut by half.
• simplified obligations for businesses: several gdpr obligations will be streamlined, including clearer rules on when data protection impact assessments (dpias) are required through eu-wide lists of processing activities, essentially providing an eu-wide standard on particular types of processing operations which will need to undergo a dpia, creating greater uniformity across the eu in this area.
• improved cookie rules: users will benefit from fewer cookie pop-ups, one-click consent and unified privacy settings, improving the overall online experience.
• clarity on use of personal data in ai: the omnibus clarifies the definition of personal data by providing legal clarity on when and how personal data can be used responsibly, e.g. providing that state of the art privacy preserving techniques for ai training are required.
• improved access to data: the package consolidates eu data laws into the data act and gdpr, simplifying compliance and unlocking high-quality datasets for ai innovation. targeted exemptions for cloud-switching rules are expected to save €1.5 billion in one-off costs.

data union strategy

in addition, the package contains a data union strategy which aims to unlock high-quality data for ai, for example through data labs and clearer data-sharing rules, while also offering practical legal support and strengthening europe’s control and protection of its data.

european business wallets:

the digital package also includes a european business wallet, a single digital tool for companies and public bodies to manage tasks that still often require in-person paperwork. it will allow businesses to securely sign, store, and share verified documents and communicate digitally with authorities across all eu member states.

next steps

the legislative proposals will now be reviewed by the european parliament and the council. in addition, the eu commission has launched a digital fitness check, a public consultation open until march 2026, to assess the cumulative impact of eu digital rules and guide future simplification efforts.

the press release can be accessed here.

the digital rulebook for the eu can be accessed here.

the factsheet – digital package factsheet can be accessed here.

the digital package q&a can be accessed here.

on 4 february 2025, the luxembourg’s commission de surveillance du secteur financier (cssf) updated its faqs on crypto-assets, reflecting significant regulatory changes and providing guidance for various stakeholders.

updated terminology and scope:

• the term "virtual assets" has been replaced with "crypto-assets" in alignment with the eu regulation 2023/1114 on markets in crypto-assets (micar).

investment guidelines:

• ucits(undertakings for collective investment in transferable securities) can invest indirectly in crypto-assets, capped at 10 per cent of their net asset value (nav).
• aifs(alternative investment funds) open to retail investors (excluding well-informed investors) are also limited to a 10 per cent nav exposure to crypto-assets.

licensing for aifms:

• luxembourg authorised aif managers (aifms) managing funds with crypto-asset exposure exceeding 10per cent of nav must obtain a specific license for "other-other fund-crypto-assets."

risk management and transparency:

• investment managers must assess the impact of crypto-assets on fund risk profiles, update risk management policies, and ensure transparent communication with investors.

aml/cft compliance:

• enhanced due diligence is required to mitigate risks of money laundering and terrorist financing associated with crypto-assets.

depositary services:

• luxembourg depositaries may act for funds investing in crypto-assets, provided they meet specific regulatory and operational requirements.

these updates emphasise the cssf's alignment with evolving eu regulations while ensuring robust risk management and investor protection in the crypto-asset space. for detailed guidance, refer to the updated faqs here and here.

the european securities and markets authority (esma) recently issued guidance regarding the transitional periods under the markets in crypto-assets regulation (mica). these transitional measures allow crypto-asset service providers (casps) operating before 30 december 2024, to align with mica requirements. however, member states may choose to limit or forgo these transitional periods to enhance financial stability and investor protection.

given that some mica transitional periods have already ended or are close to expiring and considering that market participants have had sufficient time to use these periods to engage in mica authorisation, esma’s statement highlights:

1. casp responsibilities

• casps must prioritise compliance with mica, including applying for authorisation promptly.
• casps not yet authorised are expected to implement orderly wind-down plans for services in jurisdictions where transitional periods have ended or are nearing conclusion. these plans should ensure minimal disruption to clients, such as facilitating the transfer of crypto-assets to authorised providers.

2. national competent authorities (ncas)

• ncas must closely monitor casps' cross-border activities and maintain ongoing dialogue with other member states to mitigate disruptions caused by varying transitional timelines.
• "last-minute" mica applications should be scrutinised rigorously, with unauthorised casps potentially required to cease operations during the review process.
• prepare for enforcement against the unauthorised provision of crypto-asset services.

3. investor advisory

• investors should verify that their casp is authorised under mica by consulting the esma interim mica register. engaging with unauthorised entities may result in a lack of regulatory protections.

esma emphasises the importance of early preparation by casps and proactive engagement with ncas to ensure a smooth transition to mica compliance, safeguarding market integrity and investor interests.

esma’s statement can be found here

the cayman islands monetary authority (cima) has recently published the prudential information survey (adr-046-75-02) for entities registered under the securities investment business act as registered persons.

the survey, mandated under section 6(b)(i) of the monetary authority act (2020 revision), complements cima’s efforts to strengthen the securities investment business sector's resilience and transparency. specifically, it aims to enhance the authority’s supervisory framework by assessing sector-specific activities, risks, and exposures.

the survey covers the reporting period 1 january 2025 to 31 december 2025 and must be submitted via the reefs portal between 1 january 2026 and 31 march 2026. registered persons are advised to consult the guidance for registered person prudential information survey, here, for technical assistance. timely and accurate submissions are critical.

cima provides comprehensive resources to assist with regulatory compliance. these include the reefs forms completion guides, covering applications, returns, and requests across sectors like investments, insurance, and securities.

stay informed and ensure compliance with cima’s regulatory requirements.

the prudential information survey (adr-046-75-02) can be found here

the industry notice can be accessed here and the guidance notes here

on 26 january 2026, luxembourg’s directorate of registration, estates and vat (aed) issued circular no. 792 quater, setting out aml/cft identification and verification obligations for professionals under its supervision and replacing circular 792 ter of 28 july 2025.

this post first distils the core requirements of circular 792 quater, covering identification and verification for natural persons, legal persons and legal arrangements, followed by briefly highlighting key points from the aed’s january 2026 newsletter for raifs and aifs.

circular 792 quater: identification and verification duties

the circular no. 792 quater restates and refines professionals’ obligations under the aml/cft law of 12 november 2004 to identify and verify clients’ identities on the basis of reliable and independent documents, data or information, including recognised electronic means where applicable. it expressly applies to professionals under aed supervision and clarifies that, for investment funds, the concept of “client” includes the investor registered in the fund’s register. it replaces circular 792 ter of 28 july 2025.

for natural persons, identification and verification must be performed using valid official identification documents (e.g., id card, passport) bearing a signature and a photograph and must be understandable to both the professional and the supervisory authority. where a foreign id is used, the identifying particulars must also be available in a language that ensures comprehension by the professional; upon request, a translation into an official language of luxembourg or english must be provided within two weeks of notification.

for legal persons or legal arrangements, professionals must collect and retain copies (paper or electronic) of core corporate and governance information, applying a risk‑based approach to determine the nature and extent of documents. the circular lists, among others:

• name
• official registration number (where applicable)
• legal form
• registered office and principal place of business
• identification of directors or equivalent persons interacting in the business relationship
• provisions governing authority to bind
• latest coordinated or up‑to‑date statutes or constitutive documents
• recent and up‑to‑date company register extract or equivalent proof and
• an ownership structure chart

identification must take place before establishing a business relationship.

the circular underscores ongoing due diligence throughout the relationship, whether onboarding occurs face‑to‑face or remotely, with the professional bearing the burden of proof for compliance. identification mechanisms and the extent of verification must be proportionate and justified by the prior risk analysis. the circular differentiates verification by the professional from “authentication” by a competent and independent authority, which may arise in enhanced due diligence scenarios.

aed newsletter (january 2026): supervision scope, 2024 reporting quality, and 2026 logistics

the january 2026 aed newsletter provides a supervisory snapshot, noting that approximately 3,200 raifs fall within aed’s aml/cft scope and that more than 8,000 aifs are likely to fall under the same perimeter; draft guidance to clarify the aif definition is being prepared with sector associations.

for 2024 reporting, aed observed delays and significant quality concerns. around 91 per cent of questionnaires were submitted, yet about 90 per cent were rejected, predominantly due to errors in section 1 – identification; the aed warns that incomplete or inaccurate questionnaires will be treated as null and void.

for rc reports, 88 per cent were submitted, with 68 per cent rejected; recurring deficiencies include missing signatures, incorrect or missing rcs numbers, and non‑compliant file naming.

aed reiterates the statutory duty to cooperate under article 5 of the aml/cft law, requiring timely transmission of questionnaires, rc reports and legal documents, provision of accurate and up‑to‑date information, prompt notification of changes (e.g., liquidation; changes to rc/rr or their details; changes to legal name), and retention/availability of documents for on‑desk or on‑site inspections.

looking ahead to 2026 logistics, aed requires each aml/cft questionnaire to be submitted via a separate email with no other attachments. raif invitation letters will be dispatched in february, and aif questionnaires/reports must be submitted only on aed invitation, with professionals advised to monitor the aed website.

conclusion

in light of circular 792 quater, professionals should ensure that client identification and verification across natural and legal persons-are conducted pre-onboarding, documented, intelligible, and risk-appropriate, with ongoing vigilance and the ability to evidence compliance.

the circular can be found here and the newsletter here.

on 29 january 2026, the british virgin islands international tax authority released updated lists for the common reporting standard (crs).

the 2026 update confirms that there were no new additions to either the participating or reportable jurisdictions. however, it is significant to note that antigua has been removed from both lists.

these revisions reflect the latest international information exchange obligations, and the lists continue to be updated as agreements evolve.

we provide expert legal advice on bvi law, ensuring you have the most current information to guide your strategic decisions.

the crs list of participating jurisdictions can be found here.

the crs list of reportable jurisdictions can be found here.

on 21 january 2026, the cayman islands department for international tax cooperation (ditc) announced an extension for certain reporting deadlines under the amended common reporting standard (crs). this applies to cayman financial institutions (fis) required to register and maintain information on the ditc portal.

key updates:

extended deadline:

• the deadline for appointing a principal point of contact (ppoc) and providing the date the entity became an fi has been extended to 31 january 2027.
• this applies to all cayman fis that are required to register and maintain information on the ditc portal.

ppoc requirements:

• a ppoc must be a person (natural or legal) located in the cayman islands, authorised to act as the primary contact for crs compliance.
• the ppoc must have a physical address in the cayman islands (not just a mailing address).

submission process:

• ppoc details must be submitted and kept up-to-date via the ditc portal using the prescribed forms.
• incomplete submissions may be rejected or require follow-up.

this extension aims to ensure compliance while providing additional time for fis to meet the updated requirements. the industry advisory can be found here

on 26 january 2026, the council of the eu announced the publication of the draft regulation to phase out russian pipeline gas and lng imports. the regulation operates as an amendment to regulation (eu) 2017/1938 which contains measures safeguarding the security of gas supply in the eu. the ban will begin six weeks after the regulation's entry into force, with a full ban on lng by early 2027 and pipeline gas by autumn 2027. it is expected that the regulation will be published in the official gazette imminently.

member states are required to prepare national gas supply diversification plans by 1 march 2026. breaches of the regulation will trigger strict penalties to both companies and individuals.

background to the ban

on 3 december 2025, the european union announced that an agreement was reached, to permanently end the import of russian gas and phase out russian oil, marking a significant step towards energy independence and market stability. this decision aims to eliminate reliance on russia, ensuring europe's energy security and resilience.

the agreement follows the versailles declaration and builds on the repowereu plan, which has already reduced the eu's dependency on russian gas from 45 per cent in 2022 to 13 per cent in 2025.

key highlights:

permanent ban on russian gas imports:

• liquefied natural gas (lng) imports to cease by 31 december 2026, and pipeline gas by 30 september 2027.
• member states may exceptionally extend deadlines in case their storage levels are below required filling levels.
• amendments to existing contracts are restricted to operational purposes only.
• strong anti-circumvention safeguards, alongside existing customs controls and surveillance.
• during the transition period, russian gas imports will require prior authorisation and detailed information to ensure volumes are limited to existing contractual levels.

phase-out of russian fossil fuels:

• member states must submit national diversification plans outlining measures to diversify their gas and oil supplies by 1 march 2026.
• monitoring mechanisms will prevent circumvention of the ban.
• the european commission intends to propose legislation to phase out russian oil imports by the end of 2027.

implementation and monitoring:

• monitoring mechanisms will oversee the transition to ensure compliance and prevent circumvention.
• measures will be coordinated to minimise possible impact on prices, stabilise markets and ensure alternative supplies.

the european commission’s press release can be found here and the eu council’s here

we are pleased to announce the launch of our regulatory resources hub, a centralised and easy-to-navigate guide to the core laws and compliance frameworks shaping financial services across leading jurisdictions.

the hub provides concise summaries and direct access to key regulations from bermuda, the british virgin islands, and the cayman islands, helping firms and professionals quickly identify the regulatory requirements relevant to their operations. whether you are reviewing licensing obligations, aml requirements, or governance standards, this hub is designed to support efficient and informed compliance.

current jurisdictions covered

• bermuda: overview of the core regulatory framework and licensing requirements.
• british virgin islands: summary of key financial services legislation and regulatory obligations.
• cayman islands: guidance on compliance standards and ongoing regulatory responsibilities.

we will continue to expand the regulatory resources hub including additional jurisdictions such as anguilla, cyprus, and jersey.

we invite you to explore and make use of this new resource as part of your ongoing compliance and regulatory monitoring activities.

visit our regulatory resources hub here.

stay informed. stay compliant.

on 15 january 2026, the european commission announced a significant initiative: a comprehensive review of the european venture capital fund (euveca) regulation. this marks the third time the european commission revisited this pivotal regulation since its initial adoption in 2013, signalling a continued commitment to refining the mechanisms that drive capital to europe’s most innovative enterprises.

a brief history of euveca

originally established to foster a more integrated market, the euveca regulation introduced a crucial eu marketing passport. this passport was designed to allow fund managers to market their funds not only to eu professional investors but also to sophisticated eu investors (who meet certain requirements) across borders without the need for complex, state-by-state compliance hurdles. the goal was clear: unlock capital for small and medium-sized enterprises (smes) and facilitate cross-border fundraising.

by revisiting the regulation for a third time, the european commission acknowledges that while progress has been made, further refinement is necessary to fully realise the potential of a single market for venture capital.

the scope of the review

the euveca regulation will be reviewed to streamline operations and reduce regulatory burdens, with potential broader policy initiatives beyond the euveca framework. to ensure a robust and comprehensive review, the european commission has launched two distinct consultation processes:

• targeted consultation: this stream is designed for industry experts. it seeks detailed technical feedback from fund managers, institutional investors, businesses, public authorities, and supervisors.
• public consultation: recognising the broader societal impact of financial regulation, this channel invites contributions from the general public and other interested parties.

this dual approach ensures that the review benefits from both granular, technical expertise and broader stakeholder perspectives.

focus areas:

• simplifying compliance for small-size aif managers (assets under €500 million).
• proportional adjustments for mid-sized aifms to reduce administrative burdens.
• enhancing the euveca and european social entrepreneurship funds (eusef) frameworks to better support fund managers and align with eu policy objectives.

challenges identified

• high operating costs for fund managers due to compliance, reporting, and administrative requirements.
• limited scalability for small-size aif managers due to the lack of cross-border management and marketing passports.
• regulatory thresholds under the aifmd (alternative investment fund managers directive) that may not reflect current market realities.

proposed solutions

• introducing more proportionate regulatory approaches to support fund managers' growth while maintaining investor protection and market integrity.
• harmonising national registration procedures and reducing regulatory fragmentation.
• expanding the scope of eligible investments under the euveca framework to include broader asset classes and investment strategies.

strategic alignment

this review is strategically aligned with the european commission’s broader policy objectives under the savings and investments union and the startup and scaleup strategy. the primary objective is to improve access to finance for innovative companies within the eu.

venture and growth capital funds are essential vehicles for financing the economy, supporting companies from their nascent stages through to significant growth phases. by smoothing the regulatory path for these funds, the european commission aims to create a more dynamic and integrated european market.

next steps and deadlines

for stakeholders operating in the venture capital and private equity sectors, this is an important window for engagement. the feedback gathered will directly shape the european commission’s policy work, influencing the legislative landscape for years to come.

both the targeted and public consultations are open until 12 march 2026.

the european commission plans to adopt the review of the euveca regulation in the third quarter of 2026. furthermore, there is consideration for a broader policy initiative that may extend beyond the current euveca framework to cover a wider range of venture and growth capital fund managers.

conclusion

the european commission’s decision to review the euveca regulation for a third time underscores the importance of an agile regulatory environment. the reform aims to strengthen the eu's global competitiveness, support innovative companies, and mobilise private capital for strategic priorities like digital and green transitions, such as digital transformation and green energy initiatives.

stakeholders are encouraged to provide evidence-based feedback to shape the policy framework effectively.

for more details, the press release can be found here and the consultation here and here

the cayman islands banks and trust companies act (2025 revision) serves as a comprehensive legal framework designed to regulate banking and trust activities within the cayman islands, ensuring consistency, transparency, and accountability in financial operations. consolidating legislation dating back to 1989 and integrating subsequent amendments, including those made under the law revision act (2020 revision), this act underscores the government’s commitment to maintaining a stable financial environment aligned with international standards. officially revised and published as of 1 january 2025, it supersedes the 2021 revision to accommodate recent legislative updates and industry developments.

licensing and oversight requirements

at its core, the act governs the licensing, operations, and oversight of entities involved in banking and trust business within the cayman islands. it establishes the requirement for businesses to obtain a valid licence from the cima as a precondition for operating either type of business. licences are categorised based on the nature of operations, including “a” licences for broader banking activities, “b” licences for restricted services, and various trust licences for specialised fiduciary functions. specific provisions outline the approval, issuance, and transfer of licences, ensuring that entities meet stringent fit-and-proper criteria. cima assesses the integrity, competence, and financial soundness of applicants and has discretion to impose conditions on, suspend, or revoke licences if deemed necessary in the public interest.

definitions and obligations of entities

the act provides explicit definitions of entities such as banks, trust companies, and controlled subsidiaries, delineating their respective roles and obligations. trust companies, in particular, are required to maintain adequate professional indemnity insurance or equivalent safeguards to protect against potential financial risks. additional obligations exist for licensees, such as adherence to capital adequacy requirements. this emphasises the sound financial footing expected of such institutions.

safeguards and enforcement mechanisms

several significant safeguards are embedded within the legislation to promote financial integrity. for example, auditors play a pivotal role by reporting irregularities, including instances where a licensee operates in a potentially detrimental or fraudulent manner. failure to meet obligations, such as annual audits or the submission of accounts, may result in penalties, suspensions, or more severe actions. similarly, cima wields investigatory and enforcement powers, including the ability to access a licensee’s books and records, conduct on-site inspections, and mandate corrective actions. furthermore, cima is authorised to impose public disclosures where deemed necessary to uphold transparency standards.

compliance and operational requirements

the act also addresses key compliance measures, including net worth and operational requirements that vary by licence type. the use of financial instruments and the execution of relevant fiduciary activities are strictly regulated to prevent improper practices. additionally, the issuance, transfer, or disposal of shareholders’ equity by any licensee requires prior approval from cima unless exempted.

key amendments in the 2025 revision

the 2025 revision incorporates significant amendments and updates that reflect evolving regulatory needs. among them is the introduction of stricter provisions on economic and financial group structures to ensure that such arrangements do not hinder effective supervision or jeopardise financial stability. this ensures that cayman’s financial system remains robust in both domestic and international contexts. notable updates also include explicit references to the obligations imposed under the beneficial ownership transparency act (2023 revision) and other aligned legislation, creating a cohesive regulatory architecture.

appeals and authority responsibilities

the act provides appropriate recourse for aggrieved parties, offering an appeals process against decisions made by cima. appeals can be lodged with the grand court, ensuring that disputes are adjudicated fairly. additionally, it recognises the responsibilities of cima, outlining its duties to monitor banking practices, investigate suspected contraventions, and report findings to the cabinet when necessary.

penalties and enforcement actions

further provisions introduce penalties for violations, including fines and potential imprisonment for contraventions or the intentional submission of false information. immunities are granted to cima and affiliated parties, safeguarding their function in implementing the legislation effectively. any person or entity that fails to comply with the act risks enforcement actions, from fines to the revocation of licences.

conclusion: strengthening cayman’s financial sector

altogether, the banks and trust companies act (2025 revision) reinforces cayman’s position as a regulated, reputable jurisdiction for banking and fiduciary services, maintaining a careful balance between fostering economic growth and safeguarding the financial system. through its structured provisions, the act ensures that the cima is empowered to supervise a resilient and trustworthy financial sector in the face of both local and global dynamics.

further reading

• cayman islands banks and trust companies act (2025 revision)

the cayman islands companies act (2025 revision) offers a comprehensive framework for the regulation, governance, and administration of companies in the cayman islands. this updated version consolidates decades of statutory refinement, reflecting amendments, restructurings, and enhancements made up to 1 january 2025. its provisions are designed to align with global regulatory standards, ensuring that the act remains relevant to the evolving needs of the corporate landscape.

structured for clarity and accessibility

structured into 18 parts, the act sequentially addresses the lifecycle of companies, beginning with foundational definitions and advancing through topics such as governance, corporate administration, insolvency processes, and the removal of defunct entities. accompanying schedules provide additional detail on administrative fees, approved stock exchanges, and the allocation of liquidator powers, among other operational specifics.

key definitions and incorporation guidelines

the act begins by establishing key terminology essential for its interpretation, including terms like “registrar”, “company”, and “special resolution”. it delineates the jurisdictional scope and confirms the registrar of companies as the primary regulatory authority. following this, the section on constitution and incorporation details the processes for company formation, requiring the submission of a memorandum and articles of association. it also addresses modes of incorporation and provisions for companies limited by shares or guarantee, as well as outlining processes for changes in registered offices and company constitutions.

capital, shares, and governance standards

the act extensively regulates matters concerning company capital and member liability. it provides clarity on the issuance of shares, the creation of premium accounts, and the rights attached to various classes of shares. mechanisms for altering capital structures, including the redemption and purchase of shares, are codified to ensure transparency and flexibility. management and administrative standards are set to enforce proper governance, requiring companies to maintain accurate registers, follow meeting protocols, and report annually. filing requirements and penalties for non-compliance are clearly outlined to support regulatory oversight.

frameworks for insolvency and restructuring

addressing insolvency and restructuring, the act introduces detailed frameworks for both voluntary and court-supervised windings-up. provisions for appointing restructuring officers aim to provide companies facing financial distress with a structured path towards resolution. the powers, responsibilities, and remuneration of liquidators are also clearly defined, emphasising creditor rights and ensuring an orderly dissolution process.

creditor protections and payment prioritisation

provisions to protect creditors are integrated throughout the act, ensuring transparency and fairness in the treatment of liabilities. the act enforces hierarchical payment priorities, covering wages, taxes, and other significant obligations. it also upholds the rights of secured creditors, requiring adequate disclosures in cases of default.

regulation of exempted and specialised companies

the act emphasises the regulation of exempted companies, which operate primarily outside the cayman islands. these entities are subject to annual reporting requirements and are restricted from conducting local trade without appropriate licensing. special provisions cater to other unique corporate structures, such as segregated portfolio companies, exempted limited-duration companies, and special economic zone companies, allowing them to meet specific business needs while maintaining regulatory compliance.

facilitating corporate arrangements and reinstatement

provisions are included to facilitate corporate arrangements, particularly in cases involving mergers, consolidations, and reconstructions. the act allows for complex arrangements with creditors and shareholders, while safeguards for dissenting shareholders ensure adequate compensation is provided when necessary. mechanisms for striking companies off the register due to inactivity or non-compliance are also defined, alongside detailed pathways for company reinstatement within specified time frames.

addressing cross-jurisdictional insolvency

international cooperation is addressed through provisions that enable ancillary orders under foreign bankruptcy proceedings, reflecting the act’s responsiveness to cross-jurisdictional insolvency matters and its commitment to protecting local stakeholder interests.

modernising governance with key updates

the 2025 revision incorporates key updates aimed at modernising corporate governance. bearer shares are explicitly prohibited, ensuring compliance with international standards of financial transparency. the registrar’s powers have been strengthened to enforce compliance through stricter reporting requirements and penalties for violations. enhanced provisions for restructuring officers reflect the increasing complexity of cross-border financial resolutions, while the scope for special economic zone companies has been expanded to attract international businesses and foster economic diversification.

streamlined administrative provisions

meanwhile, administrative and miscellaneous provisions streamline processes for companies adapting to new regulations. fee schedules have been revised to improve clarity and now cover a broader range of transactions and services. penalties for false declarations are emphasised to maintain the integrity of the corporate registry.

a robust foundation for sustainable growth

by consolidating its provisions and aligning with international norms, the cayman islands companies act (2025 revision) establishes a robust and adaptive legal framework. it supports sustainable growth and ensures the integrity of the business environment within the cayman islands, reinforcing the jurisdiction’s reputation as a leader in corporate governance.

further reading

• cayman islands companies act (2025 revision)
• companies (amendment and validation) act, 2024
• companies (amendment and validation) act, 2024 (commencement) order, 2024
• companies (amendment) act, 2024 (act 3 of 2024)
• companies (amendment of schedule 4) order, 2023
• companies (amendment of schedule 5) order, 2023
• companies (amendment) act, 2023
• companies (amendment) act, 2023 (commencement) order, 2024

the cayman islands exempted limited partnership act (2025 revision) represents the cayman islands' legislative framework for the establishment, governance, and operation of exempted limited partnerships (elps). first introduced in 2014, it has undergone multiple amendments and consolidations to maintain its relevance and functionality, culminating in this comprehensive 2025 revision. this act serves as a critical pillar of the islands’ legal infrastructure, fostering a robust and flexible environment tailored to the needs of investors, businesses, and financial institutions.

core purpose and scope of the act

at its core, the act seeks to regulate partnerships that operate outside the cayman islands while providing limited liability to participating limited partners. elps are restricted from engaging with the local public except insofar as necessary for their external business operations. these partnerships are commonly utilised in sophisticated commercial arrangements, such as private equity, venture capital, and investment fund structures, owing to their flexible legal framework and the favourable jurisdictional reputation of the cayman islands.

structured clarity through defined sections

a hallmark of the act is its systematic division into sections, ensuring clarity in its application. the act opens with key definitions and terms under section 2, providing precise meanings for concepts such as “general partner”, “limited partner”, and “contribution”, ensuring stakeholders operate under a common lexicon. the structure continues with section 4, which underscores the rules for elp constitution, mandating the presence of at least one general partner who bears full liability for partnership debts, while limited partners enjoy liability confined to their agreed contributions.

registration process and naming guidelines

the registration process, detailed in sections 9 through 12, establishes how an elp is officially recognised. the act requires the filing of a registration statement with the registrar of exempted limited partnerships, paid fees, and compliance with naming guidelines set out under section 6. the name must incorporate “limited partnership” or relevant abbreviations while avoiding misleading or overly generic terms to distinguish it from other entities effectively. certificates of registration are issued as conclusive evidence of compliance, granting the partnership limited liability protections.

rights and liabilities of partners

the act carefully delineates the rights and liabilities of each partner. general partners are responsible for the day-to-day management and assume unlimited liability (section 19). limited partners, in contrast, are shielded from such liabilities unless they actively participate in management, thereby breaching the “non-participation” stipulation under section 20. a limited partner can still engage in various activities, such as consulting on business matters, voting on specific issues, or serving on boards, without jeopardising their liability shield.

asset management and record-keeping requirements

a critical feature of the legislation is its robust provisions for asset management and record-keeping. under sections 29 and 30, general partners are obligated to maintain detailed registries of partnership interests and financial contributions, alongside accurate accounting records that detail all transactions. these records must be maintained for at least five years, ensuring transparency and compliance with regulatory oversight, including facilitation of inspections when required by legal or fiscal authorities.

dissolution and winding-up procedures

provisions for dissolution and winding up are laid out in sections 35 and 36. an elp can terminate voluntarily per the partnership agreement or be dissolved via judicial intervention if circumstances necessitate. the act outlines the roles of liquidators and general partners in managing winding-up procedures, ensuring debts are settled, and assets are distributed equitably among partners or creditors. notably, the dissolution process integrates elements of the companies act for consistency in the winding-up process.

de-registration and cross-border flexibility

another innovative aspect of the act is its mechanism for de-registration and re-registration. affiliations with foreign jurisdictions are seamlessly managed through section 43, which allows elps to de-register locally and continue operations as legal entities elsewhere. this flexibility has made the cayman islands a globally attractive jurisdiction for structuring cross-border partnerships.

modern business adaptations and tax neutrality

the act also incorporates forward-looking provisions to adapt to modern business practices. section 47 legalises electronic transactions, enabling elps to conduct business online, reflecting the increasing reliance on digital platforms. additionally, section 38 offers tax neutrality through tax undertaking certificates, assuring elps and their partners that future laws imposing taxes on profits or gains will not apply for up to 50 years, bolstering the cayman islands’ appeal as a tax-efficient jurisdiction.

enforcement and compliance mechanisms

the legislation’s enforcement mechanisms are firm yet fair. penalties for non-compliance, such as failure to update partnership details or maintain proper records, are outlined explicitly, ensuring accountability without discouraging legitimate business activity. at the same time, provisions such as section 49, which provides leeway for the reduction of penalties in cases of non-wilful default, foster a balanced regulatory approach.

conclusion: a reliable framework for global partnerships

ultimately, the cayman islands exempted limited partnership act (2025 revision) is a testament to the cayman islands’ commitment to creating a reliable, transparent, and investor-friendly legal framework. by balancing operational flexibility with robust regulatory oversight, the act continues to position the cayman islands as a leading destination for sophisticated international partnerships.

further reading

• cayman islands exempted partnership act (2025 revision)
• cayman islands exempted partnership regulations (2025 revision)

the cayman islands insurance law, 2010 (law 32 of 2010), enacted by the legislature of the cayman islands, establishes a comprehensive framework for the regulation and oversight of the insurance industry. the law seeks to modernise and refine the governance of insurance operations, ensuring the integrity, financial stability, and professionalism of industry participants. the legislation is structured into five key parts, each addressing crucial aspects of licensing, obligations, regulatory authority, and miscellaneous provisions, providing clarity and consistency in the regulation of both domestic and international insurance-related activities.

foundational definitions and regulatory authority

the first part, titled “preliminary,” opens with foundational definitions and terminology critical to its interpretation. among these are precise specifications for terms such as “domestic business”, “general business”, and “long-term business”, laying the groundwork for a clear legal understanding. this section also introduces the roles of key professionals such as actuaries and auditors, with explicit qualifications required for their recognition. furthermore, the law emphasises the authority and responsibility granted to the cayman islands monetary authority (cima), establishing it as the central regulatory body tasked with oversight functions.

licensing requirements and market entry

part two focuses on licensing requirements, mandating that individuals or entities engaging in insurance, reinsurance, or related professional services, such as brokerage or management, must possess a valid license issued by cima. the law delineates multiple categories of licenses, including class a, b, c, and d insurer licenses, as well as licenses for insurance agents, brokers, and managers. these classifications align with the scope and scale of operations, from domestic to international business, and each category comes with specific conditions and obligations. the rigorous application process involves the submission of business plans, compliance with solvency and capital adequacy requirements, and thorough evaluations of personnel and organisational structures to ensure fitness and propriety. this licensing framework not only governs market entry but also enhances transparency and accountability.

operational obligations for licensees

the third part of the law addresses the obligations imposed upon licensees, emphasising operational integrity and financial soundness. insurers are required to maintain minimum solvency margins, capital adequacy standards, and risk management practices. they must submit annual returns, including audited financial statements, actuarial valuations, and certifications of solvency, enabling the authority to monitor compliance and financial health. insurance brokers and managers are likewise required to maintain separate accounts for their activities and secure professional indemnity insurance. additional stipulations include regulatory oversight of share transactions, strict protocols on the use of trust funds, and the segregation of accounts for long-term and general business operations.

regulatory powers of cima

turning to regulatory powers, part four outlines cima’s extensive authority to ensure compliance and industry stability. the authority is vested with the power to review licensees’ operations through inspections, the examination of returns, and audits. it may direct entities to take corrective measures if found engaging in unsafe practices or non-compliance. the authority also holds the ability to revoke or suspend licenses, impose conditions, and step in during cases of insolvency or misconduct. to safeguard assets and creditors’ interests, cima may seek judicial assistance or appoint administrators to oversee business operations. this part underscores the regulator’s proactive approach to preserving public interest and maintaining market confidence.

miscellaneous provisions and legal protections

part five encompasses a series of miscellaneous but significant provisions, further fortifying the legislative framework. it details how benefits from policies are to inure to holders or beneficiaries, ensuring protection from creditors in bankruptcy or insolvency cases, except under specific contractual arrangements. the law addresses jurisdictional matters, affirming that all domestic insurance contracts fall under the purview of the cayman islands courts. additionally, it incorporates due process for appeals and arbitration, outlines penalties for non-compliance, and regulates the use of specific terminology associated with the insurance business to prevent misleading representations. the law repeals previous insurance regulations, but transitional provisions ensure a smooth adjustment for existing licensees and ongoing operations.

a robust and transparent insurance sector

overall, the insurance law, 2010, is a meticulously constructed legislative instrument designed to foster a robust and transparent insurance sector. through its precise definitions, stringent licensing requirements, and comprehensive regulatory mechanisms, it upholds the values of fairness, financial integrity, and consumer protection. the law positions the cayman islands as a globally respected jurisdiction for insurance business while establishing a framework that simultaneously protects domestic markets and encourages international participation.

amendments to adapt to industry evolution

the insurance law, 2010, while establishing a solid and comprehensive regulatory framework, has undergone multiple amendments to adapt to evolving industry standards and challenges. these amendments include the insurance (amendment and validation) act, 2024; insurance (amendment) act 2023; insurance (amendment) (no. 2) act, 2023; insurance (amendment) act 2022; insurance (amendment) act, 2019; insurance (amendment) act 2017; insurance (amendment) act, 2013; and insurance (validation) act, 2013; insurance (amendment) act, 2012.

these changes demonstrate the cayman islands’ steadfast commitment to refining its legislation to maintain its integrity, competitiveness, and alignment with international best practices.

further reading

• cayman islands insurance act 2010
• cayman islands insurance (amendment and validation) act, 2024
• cayman islands insurance (amendment) (no. 2) act, 2023
• cayman islands insurance (amendment) act 2023
• cayman islands insurance (amendment) act 2022
• cayman islands insurance (amendment) act, 2019
• cayman islands insurance (amendment) act 2017
• cayman islands insurance (amendment) act, 2013
• cayman islands insurance (validation) act, 2013
• cayman islands insurance (amendment) act, 2012

the cayman islands mutual funds act (2025 revision) serves as a comprehensive legislative framework governing mutual funds and their administration within the cayman islands. this revision streamlines the legal requirements, ensuring transparency, compliance, and the efficient regulation of both mutual funds and their administrative bodies. the act is structured into several distinct parts, each addressing critical aspects of the governance and operation of mutual funds, while granting the cayman islands monetary authority (cima) robust powers to oversee and enforce compliance.

preliminary section: definitions and jurisdiction

the preliminary section introduces the act, providing clarity on its application and defining key terminology. it outlines essential definitions for terms such as “mutual fund”, “equity interest”, “licensed mutual fund administrator”, and “eu connected fund”, establishing a foundation for interpreting subsequent provisions. the act further stipulates its jurisdictional application, emphasising its relevance to funds licensed or registered in the cayman islands and eu-connected funds operating within the framework of european regulations.

part 2: requirements for regulated mutual funds

part 2 delineates the requirements for regulated mutual funds, ensuring fitness, propriety, and compliance across operational practices. it mandates that mutual funds must either obtain a licence or register with cima, while also submitting a current offering document that discloses material information vital for investor decision-making. additional provisions prohibit misrepresentation as a regulated fund, and the act demands annual audits conducted by approved auditors, ensuring financial integrity. penalties for contraventions are explicitly articulated, enhancing accountability.

part 3: administration of mutual funds

part 3 shifts focus to the administration of mutual funds, dictating that mutual fund administrators must hold relevant licences issued by cima. the act defines the types of licences available, including unrestricted and restricted licences, with criteria ensuring that administrators possess the expertise and financial stability to manage mutual funds responsibly. cima is empowered to impose conditions on licences, require adherence to specific capital requirements, and ensure the competence of directors or officers managing these entities. annual fees and audited accounts are integral compliance components, reflecting an ongoing commitment to regulatory oversight.

part 3a: eu-connected funds

a more modern inclusion, part 3a addresses “eu connected funds”, reflecting international alignment with european union directives. it introduces mechanisms for these funds to opt for licensing or registration in the cayman islands, bridging local regulation with cross-border obligations. cima is tasked with monitoring compliance, facilitating attestation, and handling information exchange where required under agreements with eu regulators.

part 4: supervisory and enforcement powers of the authority

part 4 underscores cima’s supervisory and enforcement capabilities, dividing its oversight into two divisions. division 1 focuses on regulated mutual funds and eu connected funds, granting cima the power to require special audits, investigate alleged breaches, and pursue action against unregulated or non-compliant entities. division 2 extends these powers to mutual fund administrators, enabling cima to demand information, initiate audits, and impose measures to safeguard investor interests and maintain sector integrity.

part 5: duties and powers of the authority

central to the act, part 5 outlines the duties and powers of cima. it is entrusted with the administration of the legislation, the issuance and revocation of licences, and the approval of exemptions. cima also conducts regular reviews of mutual fund businesses, harnessing tools like on-site inspections, return submissions, and auditor reports to ensure compliance. where necessary, cima can impose conditions, appoint advisors or controllers, and even intervene with court approval to restructure or dissolve entities where investor interests are threatened.

part 6: miscellaneous provisions

concluding the legislative framework, part 6 encompasses miscellaneous provisions, which include obligations for auditors, an appeals process for decisions made by cima, and the cabinet’s regulatory powers. auditors who identify discrepancies or risks within funds must report these instances directly to cima, enhancing transparency and safeguarding financial stability. additionally, the act incorporates savings and transitional provisions to accommodate entities regulated under previous laws, ensuring a seamless shift to the revised framework.

conclusion: significance of the mutual funds act (2025 revision)

overall, the mutual funds act (2025 revision) represents a robust legal regime aimed at fostering investor confidence and maintaining the cayman islands’ status as a leading global financial jurisdiction. its balance of regulatory precision, operational standards, and international alignment exemplifies a commitment to both marketplace efficacy and investor protection.

further reading

• cayman islands mutual funds act (2025 revision)

the cayman islands partnership act (2025 revision), a comprehensive legislative instrument governing partnerships in the cayman islands, serves as an essential framework for both general and limited partnerships. revised and enacted as of 1 january 2025, the act consolidates long-standing provisions and more recent amendments, reflecting the evolving dynamics of commercial partnerships while maintaining consistency with common law principles. it represents an amalgamation of numerous preceding laws, including the original 1983 legislation and subsequent critical updates, ensuring a robust legal structure for partnerships operating within the jurisdiction.

the cayman islands partnership act (2025 revision)

the cayman islands partnership act (2025 revision), a comprehensive legislative instrument governing partnerships in the cayman islands, serves as an essential framework for both general and limited partnerships. revised and enacted as of 1 january 2025, the act consolidates long-standing provisions and more recent amendments, reflecting the evolving dynamics of commercial partnerships while maintaining consistency with common law principles. it represents an amalgamation of numerous preceding laws, including the original 1983 legislation and subsequent critical updates, ensuring a robust legal structure for partnerships operating within the jurisdiction.

structure and key definitions

the act is meticulously structured into seven parts, covering a wide array of aspects relevant to the formation, operation, regulation, and dissolution of partnerships. part 1 introduces the act, providing its formal citation and key definitions to aid interpretation. critical terms, such as “general partner,” “registrar,” and “partnership property,” are succinctly defined to ensure clarity and consistency in application.

definition and nature of partnerships

part 2 addresses the nature of a partnership and establishes the fundamental definition and criteria for determining its existence. it asserts that partnerships arise from two or more persons carrying on a business with a view to profit, while distinguishing partnerships from other corporate forms like registered companies. further rules delineate the necessary elements of a partnership and clarify circumstances that do not inherently constitute such a business arrangement, such as joint ownership of property without profit-sharing intentions.

partner relationships with external parties

parts 3 and 4 focus extensively on relationships involving partners, both with external parties and among themselves. part 3 dictates that each partner acts as an agent for the firm and other partners, with their actions binding the partnership under specified conditions. partners are held jointly responsible for the firm’s liabilities, and detailed rules govern issues like misapplication of funds, wrongful acts, and liability stemming from breaches of trust. notably, stipulations address situations where agreements impose limitations on individual partners’ authority, reinforcing the importance of mutual consent and notice in modifying partnership obligations.

internal relationships among partners

part 4 elaborates on the relationships between partners, cementing core principles of mutual accountability, fairness, and consent. it defines partnership property, regulating its application solely for partnership purposes, and establishes rules for managing disputes, capital interests, profit-sharing, and retirement. the section protects the integrity of partnership operations by prohibiting private profits derived from partnership opportunities without the unanimous agreement of all partners. additionally, procedures for retirement, expulsion, and the continuation of partnerships under specific conditions are comprehensively outlined.

dissolution of partnerships

part 5 governs the dissolution of partnerships, providing a structured framework to handle the cessation of partnership operations and their financial consequences. dissolution may occur due to the expiration of a fixed term, notice from any partner, illegality, or events such as bankruptcy or death. the act empowers courts to decree dissolution in cases of misconduct, permanent incapacity, financial losses, or other equitable causes. provisions also detail partners’ rights during and after dissolution, including the application of partnership property to settle liabilities and the apportionment of residual assets.

limited partnerships

part 6 introduces the special category of limited partnerships, allowing for more flexibility in structuring business relationships. these partnerships require clear delineation between general partners, who bear unlimited liability, and limited partners, whose liability is capped by their contributions. registration of limited partnerships is mandatory, involving a detailed declaration filed with the registrar. this section integrates additional safeguards such as restrictions on limited partners’ involvement in management, protections against unauthorised distributions of capital, and specific requirements for maintaining a registered office. the rights and obligations of limited partnerships, including publication, inspection of records, and handling changes in composition, are meticulously outlined.

supplemental provisions and common law integration

the supplemental provisions in part 7 ensure that traditional rules of equity and common law continue to apply alongside the act, provided these do not conflict with the statutory framework. this section also validates prior fees charged without legislative authority, affirming their lawful collection under the act.

overall, the cayman islands partnership act (2025 revision) strikes a balance between regulatory oversight and business flexibility.

conclusion: balancing oversight and flexibility

by addressing all conceivable scenarios regarding partnerships and providing clear, enforceable guidance, it fosters a secure and predictable environment for commercial activities in the cayman islands. this legislation is critical for facilitating growth, ensuring compliance, and protecting the interests of all stakeholders in partnership arrangements.

further reading

• cayman islands partnership act (2025 revision)

the cayman islands private funds act (2025 revision) serves as a comprehensive legal framework governing the regulation, registration, and supervision of private funds in the cayman islands. it establishes clear guidelines to ensure transparency, accountability, and compliance in the operations of these funds, thereby promoting investor protection and maintaining the jurisdiction's reputation as a leading global financial centre.

scope and applicability of the act

the act begins with a preliminary section that defines its scope and application. it specifies essential terminology, such as “private fund”, “operator”, and “investor”, ensuring that all parties involved understand their roles and responsibilities. by explicitly highlighting the applicability of the law to private funds operating in or from the cayman islands, the act excludes regulated mutual funds and certain non-fund arrangements, such as pension funds and sovereign wealth funds, from its purview. provisions also clarify that private funds must comply with the act once they commence business or accept capital contributions.

mandatory registration process

the second part outlines the mandatory registration process for private funds. all private funds must submit a registration application to the cayman islands monetary authority (cima) within 21 days of accepting investor commitments, alongside the requisite details and non-refundable application fee. the authority holds the discretionary power to register a fund, impose conditions, or refuse registration if necessary. falsely claiming to operate as a private fund carries significant penalties under this section, underscoring the stringent regulatory stance.

operational conditions for private funds

operational conditions for private funds are comprehensively addressed in part 3. private funds must ensure annual audits of their accounts, conducted by approved auditors, and adhere to internationally recognised accounting and auditing standards. funds are obligated to prepare annual returns, maintain accessible records, and implement robust asset valuation procedures. the valuation process is critical, requiring independence from portfolio management to prevent conflicts of interest. similarly, safekeeping of assets, cash monitoring, and the identification of traded securities are mandated, with provisions for third-party oversight or manager independence to enhance transparency and safeguard investors’ interests. cima retains the authority to intervene should these key operational standards not be met.

supervision and enforcement by cima

supervision and enforcement fall under the fourth part, which empowers cima to oversee compliance rigorously. cima may request specific information, conduct investigations for potential breaches, or take enforcement action against unregistered entities. such actions can include audits, reporting requirements, or applying to the grand court for asset protection orders. the authority’s enforcement capabilities serve as a robust mechanism to ensure that fund operators remain compliant and accountable.

duties and powers of cima

part 5 elaborates on the duties and powers granted to cima. the authority oversees the registration process, monitors private fund operations, and ensures adherence to anti-money laundering regulations. if breaches occur, cima can impose conditions, replace fund operators, appoint advisors, or assume control of fund operations. it may also seek court intervention to enforce necessary actions, including fund reorganisations or liquidations. this section emphasises the authority’s pivotal role as both a regulator and a protector of investor interests.

miscellaneous provisions and flexibility

the act concludes with miscellaneous provisions under part 6, addressing appeals, auditors’ obligations, and exemptions. aggrieved parties may appeal certain cima decisions, such as registration cancellations, to the grand court. auditors are required to report any significant financial or operational irregularities observed during their audits to cima. furthermore, private funds are exempt from the trade and business licensing act, facilitating their operational efficiency. the act also authorises the cabinet to amend its provisions through regulations or transitional arrangements, underscoring its dynamic and adaptable nature.

conclusion: a robust regulatory framework

the private funds act (2025 revision) reflects a structured and robust approach to regulating private funds in the cayman islands. by combining detailed operational requirements with stringent supervision and enforcement powers, it creates a solid foundation for fostering investor confidence, ensuring regulatory compliance, and maintaining the cayman islands’ global standing as a trusted financial hub.

further reading

• cayman islands private funds act (2025 revision)

the cayman islands securities investment business act (siba) regulates securities investment business conducted in or from the cayman islands. administered by the cayman islands monetary authority (cima), the act aims to ensure that securities-related activities are carried out by fit and proper persons under stringent supervisory standards. it applies to entities incorporated or registered in the cayman islands, including foreign entities with a local business presence. the act also aligns with international regulatory frameworks, such as anti-money laundering (aml) and counter-terrorism financing (cft) measures.

definition of securities investment business

siba defines ‘securities investment business’ broadly, covering activities such as dealing in securities, arranging deals, managing securities, and providing investment advice. it also includes managing or marketing eu connected funds and acting as a depositary for such funds. ‘securities’ are defined expansively to include shares, bonds, warrants, options, futures, and contracts for differences, among others.

licensing and registration requirements

entities engaging in securities investment business must either obtain a licence or register with cima unless exempted. licensing applies to activities such as dealing, arranging, managing, or advising on securities. persons who can register instead of becoming licensed include entities conducting business exclusively for sophisticated or high-net-worth individuals or within a corporate group.

the application process for both licensing and registration involves submitting detailed documentation, including business plans, organisational structures, and compliance measures.

exemptions from licensing and registration

certain activities are excluded from the scope of siba, such as issuing or redeeming one’s own securities, acting in fiduciary roles (eg trustee, liquidator), or conducting securities business as part of a joint enterprise. non-registrable persons include those acting in incidental capacities or carrying out securities business exclusively for sophisticated or high-net-worth individuals.

compliance obligations

licenced and registered entities must adhere to strict compliance requirements, including:

• anti-money laundering (aml) and counter-terrorism financing (cft) measures.
• corporate governance standards.
• annual audits and financial reporting.
• segregation of client and proprietary funds.

entities must also notify cima of material changes within 21 days and maintain proper records.

central to safeguarding investor interests and market fairness, the securities investment business (conduct of business) regulations, 2003, and amendments in 2020 introduced rigorous client engagement criteria, such as suitability assessments and disclosure requirements. by addressing business conduct, these regulations reinforce the fiduciary responsibilities of securities investment professionals, ensuring they act in clients’ best interests.

enforcement and penalties

cima has extensive enforcement powers, including the ability to revoke licences, impose conditions, and take legal action. the act criminalises insider trading and market manipulation, with penalties including fines of up to kyd 100,000 (usd $121,950) and imprisonment for up to seven years. cima can also apply for court orders to preserve assets or wind up non-compliant entities.

insider trading and market manipulation

siba introduces specific offences for creating false or misleading markets and insider trading. these provisions aim to protect market integrity and investor confidence. penalties for violations include significant fines and imprisonment.

significant developments

key amendments in 2019 replaced the long-standing and much adopted category of “excluded persons” and replaced it with “registered persons”, requiring re-registration by january 2020. the siba also introduced provisions for managing eu connected funds and aligned with international standards, including fatca, crs, and economic substance requirements.

in 2020, further amendments on governance were implemented under the securities investment business (amendment) act, 2020 and the securities investment business (amendment) (no. 2) act, 2020. these modifications focused on enhancing governance structures for licensees and registrants, primarily targeting the robustness of corporate ownership disclosures. additional measures within the amendment act of 2023 continued this trajectory, emphasising transparency and operational accountability.

on prudential requirements, the securities investment business (financial requirements and standards) regulations, 2003 set minimum capital and liquidity requirements for licensees, ensuring that firms maintain financial resilience to meet obligations. complementing these regulations are the securities investment business (licence applications and fees) regulations, 2003 and their subsequent amendments in 2024, which standardised licensing protocols and updated fee structures to reflect the evolving cost of regulatory oversight.

more recent developments include the securities investment business (registration and deregistration) (amendment) regulations, 2024, reinforcing the mechanisms for maintaining accurate registries of active market participants. these updated processes enhance the cayman islands monetary authority’s (cima) ability to oversee market activities.

implications for market participants

entities must carefully assess their activities to determine licensing or registration requirements and maintain ongoing compliance with cima’s regulations relative to siba and its subsidiary legislation. siba’s robust enforcement mechanisms and compliance obligations underscore the importance of adhering to its provisions.

further reading

• cayman islands securities investment business act (2020 revision)

the cayman islands virtual asset (service providers) act (2024 revision) serves as a regulatory foundation for virtual asset services in the cayman islands, establishing robust guidelines for the governance and supervision of this dynamic sector. this legislation underscores the jurisdiction’s commitment to fostering innovation while safeguarding the integrity of its financial ecosystem through structured oversight, compliance requirements, and clear operational expectations for virtual asset service providers.

defining the scope and goals of virtual asset governance

originally enacted in 2020 and refined through subsequent amendments, culminating in this consolidated 2024 revision, the act clarifies the legal framework governing virtual asset activities. its primary goal is to regulate individuals and entities engaged in offering services involving virtual assets, such as digital tokens, cryptocurrencies, and related technologies. these services include, but are not limited to, issuing virtual assets, facilitating exchanges between virtual assets and fiat currencies, operating custodial services, or managing trading platforms. the act embraces both fostering innovation and ensuring adherence to global standards in anti-money laundering (aml) and counter-terrorist financing (ctf).

registration and licensing requirements for market participants

one of the key pillars of the act is the requirement for participants in this sector to either register or obtain a license, depending on the nature of their activities. a notable differentiation is made between “registered persons”, who engage in lower-risk virtual asset activities, and “virtual asset service licensees”, who undertake more complex or potentially high-risk operations, such as custodial services or the management of trading platforms. the cayman islands monetary authority (cima), identified as the regulatory body, exercises oversight over registration, licensing, and renewal processes. applicants undergo rigorous scrutiny to demonstrate fitness and propriety, technical competence, financial stability, and compliance with aml/ctf standards. a sandbox licensing framework is also incorporated, offering a controlled environment for testing innovative technologies or methodologies that may not yet align with traditional licensing categories. sandbox licenses, granted on a temporary basis, are intended to encourage innovation while maintaining regulatory rigour.

operational standards to enhance security and resilience

the act also establishes operational standards, focusing on enhancing the security and resilience of this sector. for example, virtual asset custodians are subject to detailed requirements to safeguard client assets, including strict provisions for segregation, transparency in fees and risks, and advanced cybersecurity measures. similarly, virtual asset trading platforms must adhere to stringent rules on user access, asset listing criteria, real-time monitoring of transactions, transparency, and conflict-of-interest management. these provisions aim to fortify trust in virtual asset services while addressing the emerging risks tied to digital finance.

ensuring compliance and enforcing regulatory measures

an equally significant element of the act is its focus on compliance, enforcement, and the broader role of cima in maintaining oversight. providers are mandated to maintain meticulous records of transactions, comply with reporting obligations, and designate officers responsible for aml/ctf compliance. the authority is also empowered to inspect, revoke licenses, impose penalties, and issue cease-and-desist orders where necessary. non-compliance may result in heavy fines or imprisonment, demonstrating the seriousness with which the cayman islands addresses enforcement.

mitigating risks and safeguarding stakeholder interests

notably, the act emphasises protecting stakeholders while minimising system-wide risks. it requires providers to actively mitigate risks associated with money laundering, terrorist financing, and other criminal activities. provisions allow for the exclusion or restriction of individuals or entities that fail to meet stringent standards of integrity and competence. this focus on responsible operations seeks to align the cayman islands with global best practices and reinforce its status as a credible hub for virtual asset activities.

appeals, audits, and transparency measures

finally, the law includes measures for appeals and audits, providing mechanisms for licensees to challenge regulatory decisions and for the authority to verify compliance through annual audits. audits, which must be conducted by qualified professionals, bolster transparency within the sector. further, potential licensees are required to disclose material information about their operations, asset management practices, and any associated risks to maintain transparency with regulators and consumers.

balancing innovation and risk for a sustainable financial future

by combining innovation-friendly policies with transparent and rigorous regulatory mechanisms, the virtual asset (service providers) act (2024 revision) positions the cayman islands at the forefront of the digital finance revolution while safeguarding its financial stability and reputation. the act reflects thoughtful consideration of the evolving virtual asset landscape, ensuring a balance between enabling growth in this burgeoning sector and protecting against substantial risks. it serves as a testament to the jurisdiction’s commitment to fostering a sustainable and robust financial future.

vital enhancements introduced by the 2024 amendment

the virtual asset (service providers) act (2024 revision) has been further refined through the virtual asset (service providers) (amendment) act, 2024, introducing vital enhancements to its regulatory framework. key amendments include updates to definitions to better align with evolving industry standards, along with the repeal and substitution of several sections to streamline the application, licensing, and compliance processes. notably, the amendment emphasises the non-refundable nature of fees, new fit-and-proper criteria for directors, and additional compliance obligations, such as the requirement for audited financial statements under certain conditions. furthermore, the supervisory authority has been granted expanded powers, including enhanced measures for monitoring and enforcement, and new provisions for addressing non-compliance and addressing risks associated with innovative business models. these modifications aim to bolster operational clarity, strengthen risk management, and ensure that the cayman islands remains a globally respected jurisdiction for virtual asset services.

further reading

• cayman islands virtual asset (service providers) act (2024 revision)
• cayman islands virtual asset (service providers) (amendment) act, 2024

the bermuda companies act 1981 is a comprehensive legal framework that governs various aspects of company law, addressing the formation, management, administration and dissolution of companies operating within bermuda. the act is divided into multiple parts, each focusing on specific areas of corporate regulation, ensuring clarity and structure in its application.

key definitions and initial provisions

the act begins by defining key terms and concepts, such as “affiliated company”, “exempted company”, “local company”, and “mutual company”, among others. it establishes the roles and responsibilities of the registrar, outlines the application of the act, and sets restrictions on certain business activities. the incorporation process is detailed, including the requirements for a company’s memorandum and bye-laws, the naming conventions for companies, and the procedures for registration. companies are also provided with the ability to alter their structure, such as re-registering as unlimited liability companies or vice versa.

regulations on public offerings and prospectuses

public offerings and prospectuses are addressed extensively, with the act mandating that companies offering shares to the public must publish a prospectus containing specific information. it also outlines the liabilities of officers and experts in relation to misstatements in prospectuses and the conditions under which shares can be allotted.

share capital, debentures, and dividends

the regulations surrounding share capital, debentures and dividends are equally detailed, including provisions for issuing redeemable preference shares, purchasing a company’s own shares and maintaining a share premium account. the act ensures that dividends are only declared when a company is solvent and able to meet its liabilities.

management and administration of companies

the management and administration of companies are governed by strict rules, requiring companies to maintain a registered office, keep a register of members and convene general meetings. directors and officers are subject to duties of care, honesty and good faith, with provisions for their indemnification and liability. the act also mandates the appointment of auditors, their roles and the standards they must adhere to, ensuring transparency and accountability in financial reporting.

beneficial ownership and corporate restructuring

beneficial ownership is another critical area, with companies required to identify and maintain a register of beneficial owners. the act also provides for arrangements, reconstructions, amalgamations, and mergers, offering a framework for corporate restructuring. the protection of minority shareholders and the investigation of company affairs are addressed to ensure fairness and compliance with the law.

regulations for local and exempted companies

local companies are subject to specific regulations, including restrictions on business activities and ownership to preserve bermudian control over economic resources. exempted companies, on the other hand, are generally restricted from conducting business within bermuda, except under certain conditions. these companies must comply with requirements such as appointing a resident representative and submitting annual declarations.

continuance and discontinuation of companies

the act also facilitates the continuance of foreign corporations in bermuda and the discontinuation of bermudian companies to other jurisdictions. overseas companies require permits to operate in bermuda, with the minister considering the economic impact and conduct of such companies before granting approval.

mutual companies and mutual funds

mutual companies, defined as those operating on a mutual principle without share capital, are required to maintain a reserve fund and adhere to specific membership criteria. the act also regulates mutual funds, allowing them to redeem or purchase their own shares under certain conditions.

winding-up and liquidation processes

the winding-up process is comprehensively covered, detailing the circumstances under which a company may be wound up, the roles of liquidators, and the rights and obligations of creditors and members. the act provides for the management of company assets during liquidation, the disposal of books and records and the handling of unclaimed assets.

receivers, managers, and general provisions

receivers and managers are also regulated, with provisions for their appointment, duties, and liabilities. the act includes general provisions on the maintenance of registers, the inspection of books, and penalties for non-compliance. it grants the minister powers to inspect and investigate company affairs and provides avenues for appeals to the supreme court.

further reading

• bermuda companies act

the bermuda digital asset business act 2018 serves as a comprehensive legislative framework designed to regulate digital asset businesses operating within bermuda. enacted to ensure the protection of clients and the integrity of the financial ecosystem, the act empowers the bermuda monetary authority (bma) to oversee and enforce compliance among entities engaged in digital asset activities. the legislation is divided into several parts, each addressing specific aspects of digital asset business operations, licensing, compliance, and enforcement.

preliminary provisions and definitions

the act begins by defining key terms, such as “digital asset”, “director”, “controller”, and “senior executive”, to ensure clarity in its application. it outlines the scope of digital asset business activities, including issuing, selling, or redeeming digital assets; operating exchanges; providing custodial wallet services; and facilitating digital asset lending or derivative transactions. the bma is tasked with issuing codes of practice, prudential standards, and guidance to ensure businesses operate in a manner that safeguards client interests and maintains market stability.

licensing requirements

a cornerstone of the act is the requirement for businesses to obtain a licence before conducting digital asset activities in or from bermuda. licences are categorised into three classes: class f (full licence), class m (medium-term licence), and class t (temporary licence for pilot testing). applicants must submit detailed business plans, policies, and procedures, along with evidence of compliance with anti-money laundering (aml) and anti-terrorist financing (atf) regulations. the bma evaluates applications based on minimum criteria, including the fitness and propriety of controllers and officers, the prudence of business operations, and the adequacy of corporate governance structures.

client asset protection and financial accountability

the act mandates licensed undertakings to maintain separate accounts for client assets, ensuring their protection from creditors and operational risks. businesses must also secure indemnity insurance or equivalent measures to safeguard client interests. annual financial statements, audited by approved auditors, are required to ensure transparency and accountability. auditors are obligated to report any material concerns to the bma, further enhancing oversight.

compliance and enforcement mechanisms

to uphold regulatory standards, the act grants the bma extensive powers to monitor and investigate licensed undertakings. this includes the authority to require the production of documents, conduct on-site inspections, and appoint investigators to examine suspected contraventions. the bma can impose civil penalties, issue public censures, and revoke or restrict licences in cases of non-compliance. prohibition orders may also be issued to individuals deemed unfit to perform functions related to regulated activities.

shareholder and controller oversight

the act introduces stringent controls over shareholder and controller activities. any individual or entity seeking to acquire significant control over a licensed undertaking must notify the bma and obtain approval. the authority retains the right to object to new or existing controllers if their influence poses a risk to clients or the business’s compliance with regulatory standards.

appeals and legal recourse

licensed undertakings and individuals affected by bma decisions have the right to appeal to a tribunal. the tribunal, constituted by experienced legal and financial professionals, reviews cases to ensure decisions are lawful and evidence-based. further appeals on points of law may be made to the courts, providing an additional layer of judicial oversight.

confidentiality and information sharing

the act emphasises the confidentiality of information obtained during regulatory activities. disclosure is permitted only under specific circumstances, such as facilitating the bma’s functions or assisting other regulatory authorities. strict penalties are imposed for unauthorised disclosures, ensuring the integrity of sensitive information.

miscellaneous provisions

additional provisions address the maintenance of transaction records, the prohibition of misleading business names, and the issuance of certificates of compliance. transitional arrangements allow businesses operating before the act’s commencement to continue their activities while applying for a licence.

conclusion

in summary, the bermuda digital asset business act 2018 establishes a robust regulatory framework that balances innovation in the digital asset sector with the need for client protection and market integrity. by empowering the bma with comprehensive oversight capabilities, the act positions bermuda as a leading jurisdiction for digital asset businesses while maintaining high standards of financial regulation.

further reading

• digital asset business act

establishment and objectives
the bermuda monetary authority act 1969 (act) establishes the bermuda monetary authority (bma) as a corporate body with perpetual succession. its primary objectives include issuing and redeeming bermuda's currency, supervising and regulating financial institutions, promoting financial stability, detecting and preventing financial crimes, and advising the government on monetary matters. the bma also oversees innovative business development through its innovation hub.

governance and structure

the bma is governed by a board of directors, comprising executive and non-executive members, including a chairman appointed by the minister of finance. the board determines the bma’s policies and strategies, while non-executive members oversee compliance with these policies. the act provides immunity to officers acting in good faith and allows delegation of powers to committees or officers.

currency and reserves

the act establishes the bermudian dollar as the national currency, pegged to parity with sterling or other currencies as determined by the governor. the bma has the sole authority to issue currency notes and coins, which are legal tender. it must maintain external and local reserves equivalent to at least 50 per cent of its currency liabilities.

supervision of financial institutions

the bma is empowered to supervise, regulate, and inspect financial institutions operating in bermuda. it enforces compliance with anti-money laundering and anti-terrorist financing laws and assists foreign regulatory authorities. the act also mandates the collection of fees from financial institutions for licensing and regulatory services.

innovation hub

the act introduces provisions for an innovation hub to support innovative financial businesses. entities can apply for authorisation to operate within the hub, subject to fees and confidentiality requirements.

financial management and reporting

the bma is required to maintain a general reserve and submit annual budgets and audited financial statements to the minister. it must publish an annual report and monthly statements of its assets and liabilities.

enforcement and penalties

the act outlines penalties for non-compliance, including fines and imprisonment for offences such as providing false information, failing to furnish required data, or breaching confidentiality. it also grants the bma powers to assist foreign regulators and enforce compliance with international standards.

amendments and updates

the act has undergone numerous amendments to address evolving financial regulations, including the introduction of digital asset business oversight, enhanced prudential standards, and expanded powers for innovation and international cooperation.

this legislation forms the cornerstone of bermuda’s financial regulatory framework, ensuring stability, transparency, and compliance with global standards.

further reading

• bermuda monetary authority act

the bermuda monetary authority amendment (no. 3) act 2018 represents a significant legislative update aimed at revising and standardising the fee structures across various financial sectors regulated by the bermuda monetary authority (bma). this act, which came into effect on january 1, 2019, introduces amendments to the fourth schedule of the bermuda monetary authority act 1969, alongside consequential changes to other related legislation, including the banks and deposit companies (fees) act 1975, the investment funds act 2006, and others. the overarching goal of these amendments is to ensure a more structured and transparent fee framework for entities operating under the purview of the bma.

phased fee implementation across three years

the act is structured to implement a phased fee schedule spanning three years—2019, 2020, and 2021—under parts a, b, and c of the fourth schedule. each part outlines specific fees applicable to various financial entities, including banks, insurance companies, investment funds, corporate service providers, and digital asset businesses. the fee structures are designed to reflect the scale and complexity of the entities, with larger institutions or those managing higher assets or premiums subject to higher fees. for instance, banks are categorised into bands based on their consolidated gross assets, with annual fees ranging from us$20,620 for smaller institutions to over us$400,000 for the largest entities by 2021.

fee structures for insurance companies

insurance companies are similarly categorised into classes based on their business type and scale, with fees varying accordingly. for example, class 1 insurers carrying on general business are subject to lower fees compared to class 4 insurers or those managing significant gross premiums. the act also introduces specific fees for applications, such as those for registration, licence renewals, and extensions of filing deadlines. notably, the legislation includes provisions for sliding scale fees for complex applications, such as internal capital model approvals, which are assessed based on the structural and organisational complexity of the applicant.

digital asset businesses and innovation

the amendments extend to digital asset businesses, reflecting bermuda’s commitment to fostering innovation in financial technology. licensed undertakings in this sector are subject to application and annual fees calculated based on their estimated client receipts, with a cap of us$450,000. this ensures that fees are proportionate to the scale of operations while supporting the growth of the digital asset industry.

investment funds and trust businesses

additionally, the act revises the fee structures for investment funds and trust businesses, introducing application and annual fees that align with the size and scope of operations. for instance, investment funds are categorised into standard, administered, and institutional funds, each with distinct fee requirements. trust businesses, on the other hand, are subject to fees based on their gross income, ensuring that smaller entities are not disproportionately burdened.

ensuring compliance and accountability

the phased implementation of these fee schedules underscores the bma’s commitment to providing a predictable and equitable regulatory environment. by aligning fees with the scale and complexity of regulated entities, the act aims to balance the financial burden on businesses with the need to maintain robust regulatory oversight. furthermore, the inclusion of late filing penalties and transaction fees for specific applications ensures compliance and accountability within the financial sector.

conclusion: modernising bermuda’s financial framework

in summary, the bermuda monetary authority amendment (no. 3) act 2018 represents a comprehensive effort to modernise and streamline the fee structures across bermuda’s financial regulatory framework. by introducing a transparent and scalable fee system, the act supports the bma’s mission to uphold the integrity and stability of bermuda’s financial system while fostering growth and innovation in key sectors.

further reading

• bermuda monetary authority amendment (no. 3) act

the bermuda insurance act 1978 is a foundational framework governing bermuda's insurance sector, dealing comprehensively with regulatory oversight and operational standards for insurers, brokers, agents, and other key entities involved in the industry. the act’s primary objective is to safeguard the interests of clients and potential clients, ensuring robust consumer protection while fostering a well-regulated and resilient insurance environment. to achieve this, the bermuda monetary authority (bma) is entrusted with supervisory authority, granting it the power to monitor compliance, enforce regulations, and uphold prudential standards.

registration, solvency, and local oversight

one of the act’s fundamental features is the obligation it places on insurers to register with the bma. this process ensures that entities meet stringent criteria before engaging in insurance activities, including compliance with financial solvency and regulatory capital requirements. insurers are required to maintain balance sheets reflecting their ability to meet ongoing obligations, adhere to defined technical standards, and secure approval through the appointment of qualified auditors and, in some cases, approved loss reserve specialists. further cementing bermuda’s position as a well-regulated jurisdiction, the act mandates insurance providers to keep their head offices within the territory, reinforcing the local oversight of operations.

emphasis on transparency, accountability, and governance

transparency and accountability are embedded through the requirement for insurers and intermediaries to file statutory financial statements and returns annually. this approach is bolstered by obligations to submit declarations of solvency compliance and audited financial reports prepared in accordance with prescribed standards, such as international financial reporting standards (ifrs). the role of corporate governance is also emphasised, requiring insurers to adopt policies commensurate with the nature, size, and complexity of their operations, ensuring sound management practices across the sector.

robust policyholder protection measures

the act is equally stringent concerning policyholder protection. it prohibits insurers from engaging in non-insurance business activities unless deemed ancillary to their insurance functions, defining boundaries for operational focus. policyholders gain further reassurance through provisions requiring insurers to avoid misleading advertisements or practices, with intermediaries held personally liable for policies arranged with unregistered insurers.

adaptive legislation through amendments and updates

amendment mechanisms make the act a living document, capable of evolving with industry demands. significant revisions have introduced enhanced capital requirements and prudential standards specifically tailored to insurers’ operating group structures. other adjustments encompass the introduction of group supervision to regulate interconnected entities effectively and the incorporation of rules aimed at handling cyber reporting events, reflecting modern threats to operational stability.

enforcement mechanisms and supervisory powers

the enforcement mechanisms conferred upon the bma are notably robust. the authority possesses extensive investigative powers, enabling it to request information, examine pertinent records, and initiate inquiries into regulatory contraventions. it can impose civil penalties, issue public censures, or, where necessary, serve prohibition orders to protect the marketplace’s integrity. insurers failing to meet solvency margins face intervention measures, including asset maintenance directives or restrictions on dividend payments to safeguard creditors and policyholders.

shareholder control and operational changes oversight

furthermore, the act defines clear processes regarding the control of shareholder stakes in insurers, mandating notifications to the authority for prospective changes in ownership. it also governs material changes in business operations, requiring timely disclosure to the bma to maintain continuous oversight.

commitment to leadership and evolving standards

by combining detailed regulatory stipulations with enforcement authority, the insurance act 1978 establishes a highly structured regulatory framework. it demonstrates bermuda’s commitment to being a global leader in the insurance sector, where the interests of markets and consumers are expertly balanced with the need for efficiency, innovation, and growth. through its provisions, the act continues to adapt, ensuring its relevancy in addressing contemporary challenges and safeguarding the robust functioning of bermuda’s insurance industry.

further reading

• bermuda insurance act

the bermuda investment business act 2003 serves as a comprehensive legal framework for regulating investment business activities within bermuda. it is structured into six parts, each addressing specific aspects of investment business, from preliminary definitions to regulatory measures, enforcement, and miscellaneous provisions.

part i: preliminary provisions

this section establishes the foundational definitions and scope of the act. it defines key terms such as “investment”, “investment business”, and roles like “director”, “controller”, and “senior executive.” it also outlines the criteria for determining parent and subsidiary undertakings and participating interests. the act applies to individuals and entities conducting investment business in or from bermuda, whether incorporated locally or abroad.

part ii: the authority

the bermuda monetary authority (bma) is designated as the regulatory body responsible for overseeing investment business. the bma’s duties include supervising licensed entities, issuing codes of conduct, and ensuring compliance with prudential standards. it is empowered to publish statements of principles, exempt or modify prudential requirements, and take necessary actions to protect public and client interests. the minister of finance may also issue policy directions to the bma.

part iii: regulation of investment providers

this extensive section governs the licensing, registration, and supervision of investment providers. it introduces two classes of registered persons—class a and class b—and outlines the requirements for obtaining licences or registrations. class a entities are typically foreign-registered but operate without a physical presence in bermuda, while class b entities maintain a principal place of business locally. the act also addresses the roles of senior representatives, material changes in operations, and the display of licences. alternative investment fund managers (aifms) are subject to specific licensing and compliance requirements under a dedicated chapter.

the supervision of investment providers includes provisions for restricting or revoking licences, issuing directions to safeguard client interests, and handling unsolicited calls. the act also establishes appeal tribunals for entities aggrieved by regulatory decisions and mandates the preparation of financial statements, annual returns, and quarterly reports. auditors play a critical role in ensuring compliance, with obligations to report significant findings to the bma.

part iv: regulation of investment exchanges and clearing houses

this part focuses on recognised investment exchanges and clearing houses, exempting them from licensing requirements under certain conditions. it sets out the qualifications for recognition, application procedures, and ongoing obligations, including the preparation of audited financial statements and compliance with prudential standards. bma retains the power to issue directions, revoke recognition, and enforce compliance through disciplinary measures.

part v: restriction on disclosure of information

the act imposes strict confidentiality requirements on information obtained under its provisions. disclosure is permitted only under specific circumstances, such as facilitating the functions of the bma or other regulatory bodies, or in connection with legal proceedings. unauthorised disclosure is a criminal offence, carrying significant penalties.

part vi: miscellaneous and supplemental provisions

this final section addresses offences related to false documentation, corporate liability, and the imposition of civil penalties. it also outlines procedures for serving notices, making regulations, and transitioning from the repealed investment business act 1998. the act includes schedules detailing the types of investments and activities covered, as well as the minimum criteria for licensing and registration.

in essence, the bermuda investment business act 2003 establishes a robust regulatory framework to ensure the integrity, transparency, and prudence of investment business activities in bermuda. it balances the need for regulatory oversight with provisions that support the growth and stability of the financial sector.

further reading

• investment business act

the bermuda investment funds act 2006 serves as a comprehensive legislative framework governing the establishment, operation, and regulation of investment funds within bermuda. this act, which has undergone several amendments to adapt to evolving financial landscapes, is pivotal in ensuring the integrity, transparency, and efficiency of bermuda’s investment fund industry. it is structured into multiple parts, each addressing specific aspects of fund management, administration, and oversight.

preliminary provisions and definitions

the act begins with preliminary provisions, including its short title, commencement, and key definitions. it introduces terms such as “controller”, “associate”, and “investment fund”, providing clarity on the roles and responsibilities of various stakeholders. the bermuda monetary authority (bma) is designated as the primary regulatory body, tasked with issuing statements of principles and ensuring compliance with the act.

classification and regulation of investment funds

part ii of the act delves into the core aspects of investment funds. it categorises funds into private, professional, and registered classes, each with distinct qualifications and procedural requirements. for instance, private funds are limited to 20 participants and are prohibited from public promotion, while professional funds cater to qualified participants with specific financial thresholds. the act mandates the registration and authorisation of funds, emphasising the importance of segregated accounts to protect participants’ assets. it also outlines the criteria for fit and proper persons to serve as operators, officers, or service providers, ensuring that only competent and ethical individuals manage these funds.

prohibitions and oversight of unauthorised funds

the act imposes strict prohibitions on unauthorised, unregistered, and undesignated funds, with significant penalties for non-compliance. it introduces the concept of “overseas funds,” which are investment funds incorporated outside bermuda but designated by the bma to operate within its jurisdiction. these funds must adhere to both local and international regulatory standards, with provisions for annual declarations and potential cancellation of designation.

fund administrators and client protection

part iii addresses fund administrators, although many provisions in this section have been repealed in recent amendments. the focus shifts to ensuring that fund administrators operate in a manner that protects the interests of clients and maintains the integrity of the financial system.

appeals and dispute resolution mechanisms

the act also establishes a robust framework for appeals and dispute resolution. part iv introduces appeal tribunals, detailing their constitution, procedures, and powers. it provides aggrieved parties with the right to challenge decisions made by the bma, ensuring fairness and accountability in regulatory actions.

information gathering and investigative powers

information gathering and investigation powers are outlined in part v. the bma is empowered to obtain information, require the production of documents, and conduct investigations into suspected contraventions. these provisions are designed to enhance transparency and enable the authority to take timely corrective actions. the act also includes measures to protect whistleblowers and ensure the confidentiality of sensitive information.

disciplinary measures and enforcement

disciplinary measures are a critical component of the act, as detailed in part va. the bma can impose civil penalties, issue public censures, and make prohibition orders against individuals or entities that fail to comply with regulatory requirements. these measures serve as deterrents against misconduct and reinforce the importance of adherence to the law.

reporting obligations for fund operators

the act emphasises the importance of accurate and timely reporting. operators of authorised funds are required to submit periodic reports to the bma, detailing their activities and compliance with the act. any material changes to a fund’s offering document or structure must be promptly reported, ensuring that participants are adequately informed.

confidentiality and disclosure restrictions

in its concluding sections, the act addresses the restriction on the disclosure of information, safeguarding the confidentiality of participants and other stakeholders. it also outlines miscellaneous provisions, including penalties for false documentation and offences by companies.

conclusion: a pillar of bermuda’s financial framework

overall, the bermuda investment funds act 2006 is a cornerstone of bermuda’s financial regulatory framework. it balances the need for robust oversight with the flexibility required to foster innovation and growth in the investment fund industry. by establishing clear guidelines and stringent enforcement mechanisms, the act reinforces bermuda’s reputation as a premier jurisdiction for investment funds.

further reading

• bermuda investment funds act

the bvi securities and investment business act (revised edition as of 1 january 2020), known as “siba”, is a comprehensive legal framework established in the british virgin islands to govern the licensing, regulation, and oversight of investment business activities within and from the territory. this iteration of siba consolidates amendments made since its original enforcement in 2010, reflecting legislative updates up to 2019 (but note, an important amendment in 2023 – see below – is not yet consolidated). it outlines obligations for individuals and entities operating in investment sectors and ensures adherence to standards designed to promote financial integrity, investor protection, and market stability.

structure and definitions in the act

siba is structured into six main parts, each addressing distinct areas of investment regulation. the preliminary provisions include foundational definitions and clarifications, with detailed interpretations of terms such as “investment business”, “investment activity”, “licensee”, and “public interest”. the definitions underscore the act’s emphasis on delineating scope and applicability to a range of activities and participants, from mutual funds to directors of investment entities.

regulation of investment businesses

part i addresses the regulation of investment businesses, introducing licensing as a legal requirement for any entity intending to conduct such activities in or from the bvi. notably, it emphasises prohibiting unauthorised business, setting stringent compliance standards for anyone seeking to operate within this jurisdiction. licences are categorised into several classes, reflecting the nature of permissible activities – including acting as principal, arranging, managing and acting as a custodian. applicants must demonstrate financial soundness, adequate resources, and the requisite expertise. provisions for maintaining capital resources, appointing directors and senior officers, and obtaining prior approvals for significant structural changes form crucial safeguards under this section.

public offerings of securities

part ii governs public offerings of securities, establishing the groundwork for transparency and investor protection. it requires issuers to register prospectuses, ensuring they disclose pertinent information and comply with specified content requirements. this part delineates rules for controlling securities offerings, including exemptions for certain cases. siba further empowers the fsc to suspend or terminate non-compliant offers and introduces mechanisms for compensation in cases involving misleading advertisements or defective prospectuses.

regulation of mutual funds

part iii deals expansively with mutual funds, classifying them as public, private, professional, or recognised foreign funds. registration or recognition is mandatory for funds seeking to operate legally, and managers and administrators must also comply with licensing provisions. siba mandates financial record-keeping, the preparation of audited financial statements, and adherence to governance standards. it also sets investor eligibility thresholds and prohibits unauthorised fund promotion. recognised foreign funds must exhibit compliance with comparable regulatory standards in their countries of origin, ensuring cross-jurisdictional consistency in investor protections.

private investment funds

part iiia, introduced in later amendments, focuses on private investment funds. these funds, though organised similarly to mutual funds, cater to a limited class of investors, promoting portfolio diversification. stringent requirements ensure conformity with constitutional documents and limit investor participation to professional and qualified individuals. this section also prescribes specific guidelines regarding the registration process, investor access thresholds, and ongoing compliance obligations.

administrative provisions

part iv provides overarching administrative provisions applicable across licensees and funds. it mandates the appointment of a certified authorised representative for entities without significant local management presence, facilitating communication with the fsc. furthermore, this part entails requirements related to the preparation, submission, and audit of financial statements for governance oversight and public accountability.

market abuse and criminal liabilities

part v, which addresses market abuse, imposes criminal liabilities on insider trading and market manipulation. it defines key concepts like “inside information” and “professional intermediary” while prescribing substantial penalties for individuals and entities engaged in such misconduct. this section underscores the jurisdiction’s commitment to fostering transparency and fairness within its financial markets.

miscellaneous provisions and adaptability

finally, part vi contains miscellaneous provisions, allowing for the creation of additional regulations, refinements to penalties, and codification of reporting obligations. these measures enhance flexibility to adapt the legislative framework in response to evolving market conditions and enforcement challenges. the inclusion of schedules categorising investments, defining qualified investors, and outlining transitional provisions further illustrates siba’s methodical approach to regulation.

summary of the act’s impact

overall, siba forms a bedrock of financial regulation in the british virgin islands, characterised by robust licensing protocols, governance requirements, actionable investor protections, and clear enforcement mechanisms. its detailed provisions establish the territory as a reputable jurisdiction for conducting investment business activities while safeguarding market confidence and compliance.

introduction to the 2023 amendment

the securities and investment business (amendment) act, 2023, introduces a series of refinements to the principal securities and investment business act, building upon its regulatory framework to address evolving market dynamics. enacted on 20 march 2023 and gazetted on 21 march 2023, the amendment emphasises enhanced oversight of ownership structures within the investment business ecosystem by defining and incorporating the concept of “controlling interest”.

definition of controlling and significant interests

the definition of “controlling interest” was added to clarify when an individual, by ownership or influence, impacts a licensee’s operations or governance. it encompasses numerous scenarios, including holding more than 50 per cent of a licensee’s voting rights, retaining significant influence that does not reach the majority threshold, or exerting authority through indirect control or directives to directors or senior officers. additionally, the definition of “significant interest” was revised to establish a concrete threshold of 10 per cent or more in voting rights, distributions, or the power to appoint or remove directors.

application of amendments to licensing and ownership

the amendment applies these clarifications to several pivotal sections of siba. section 6, which governs the licensing and scrutiny of applicants, now considers both significant and controlling interests in determining an applicant’s eligibility. similarly, section 11, related to acquisitions and disposals of such interests, incorporates the nuanced oversight of controlling interests, ensuring that any transactions are subject to the commission’s approval. this extension applies consistently through subsections one to five of section 11, reinforcing comprehensive regulatory coverage.

alignment of certifications with new classifications

section 64, addressing certifications for authorised representatives, was amended to align with these new classifications of interest. collectively, these changes bolster the fsc’s ability to oversee ownership structures rigorously, ensuring that controlling or influential parties within licensee organisations uphold compliance and contribute positively to the integrity of the financial market.

impact of the 2023 amendment

by expanding its regulatory scope and refining the governance standards, the securities and investment business (amendment) act, 2023, augments the siba’s framework, creating a more resilient and transparent investment business environment in the british virgin islands. these targeted amendments align closely with the jurisdiction’s overarching goals of maintaining financial stability, fostering investor trust, and upholding market soundness.

further reading

• bvi securities and investment business act (consolidated as at 1 january 2020)
• 2023 amendments

the bvi banks and trust companies act, revised as of 1 january 2020, continues to serve as a foundational legal instrument governing the licensing, regulation, and supervision of banking and trust operations within the bvi. this comprehensive legislation, known as the “btca”, remains pivotal in ensuring the sound management of financial entities, safeguarding stakeholder interests, and sustaining public confidence in the jurisdiction’s financial services sector. with subsequent amendments in 2022, 2023, and 2024, the act demonstrates its adaptability in addressing emerging regulatory needs and aligning with global best practices.

licensing framework and local presence requirements

the btca establishes a robust licensing framework that prohibits the operation of banking and trust businesses without a valid licence issued by the financial services commission (the fsc). licence categories are well-defined, including general banking licences, restricted licences, and various classes of trust licences, which are tailored to meet the specific operational needs of different business models. entities must satisfy stringent criteria related to financial resources, organisational structure, and regulatory compliance to gain and maintain these licences. by requiring licensees to designate a principal office and authorised agents, the act ensures that entities maintain a strong local presence for regulatory interactions.

2022 amendment: bridge banks and systemic risk management

under the banks and trust companies (amendment) act, 2022, notable enhancements to the regulatory framework were introduced. one of the most significant changes was the addition of provisions enabling the licensing and operation of “bridge banks”. these institutions can temporarily acquire and manage the assets, liabilities, and operations of failed banks, ensuring continuity of services and financial stability during crisis situations. the amendment also introduced the concept of “systemically important banks” (sibs), designating financial institutions whose failure would pose a systemic risk. sibs are subject to heightened regulatory standards to mitigate potential crises. enhanced resolution powers granted to the commission allow for the orderly wind-down of failed banks, including liquidation, asset transfers, and depositor reimbursements. the amendment also required licensees to provide proof of deposit insurance under the virgin islands deposit insurance act within six months of operation, further strengthening depositor protection.

2023 amendment: governance and broader definitions

the 2023 amendment introduced additional refinements to the definition and governance of financial entities. the term “significant interest” now encompasses the ability to appoint or remove one or more directors of a licensee, reflecting a broader scope of control that necessitates regulatory oversight. additionally, the act clarified the definition of trust business to include arranging for another person to act in fiduciary capacities. the amendment reinforced procedural diligence by mandating that all appointments of directors and senior officers by licensees require prior approval from the commission. these measures underscore the importance of effective corporate governance in maintaining financial sector integrity.

formalisation of the 2024 amendment

further expanding on the framework, the banks and trust companies (amendment) act, 2024, introduced additional refinements to definitions and operational requirements. a key update was made to the term “trust business”, which now explicitly includes performing equivalent fiduciary functions for other legal arrangements. this broader scope ensures that emerging legal structures akin to traditional trusts are subjected to the same standards of regulation and oversight. the amendment reinforced deposit insurance requirements, compelling applicants for banking licences to submit a copy of their deposit insurance policy within six months of licensing, thereby aligning with the virgin islands deposit insurance act.

the enforcement of the 2024 amendment was formalised through statutory instrument 2024 no. 76, setting its commencement date as 2 january 2025. this procedural measure guarantees clarity on the regulatory expectations and timelines, enabling stakeholders to adequately prepare for compliance.

emphasis on transparency and compliance

across all iterations, the btca places a strong emphasis on financial transparency and operational integrity. licensees must maintain prescribed capital resources and liquidity thresholds, engage qualified auditors, and comply with annual and quarterly financial reporting requirements. severe penalties are outlined for non-compliance, ranging from monetary fines to imprisonment, emphasising the commitment to upholding lawfulness within the financial ecosystem. additions such as the prohibition of anonymous accounts and restrictions on using sensitive words like “bank” and “trust” further highlight an unwavering stance against money laundering and other illicit activities.

adaptability and global alignment

the btca’s consistent adaptability is reflected in provisions granting the fsc authority to issue regulatory codes and address emerging challenges. these codes govern areas such as client asset protection and the consolidated supervision of banking groups. by incorporating global standards and proactive oversight mechanisms, the banks and trust companies act solidifies the bvi’s position as a competitive yet tightly regulated financial jurisdiction. the ongoing evolution of the law through targeted amendments underscores its role in fostering a secure, dynamic, and investor-friendly financial environment.

further reading

• bvi banks and trust companies act (consolidated as at 1 january 2020)
• 2022 amendments
• 2023 amendments
• 2024 amendments
• notice of the banks and trust companies (amendment) act 2024 (no 17 of 2024)

the bvi business companies act, revised edition 2020 (the bvibca), stands as a foundational legal framework that governs the incorporation, administration, and operation of business entities within the british virgin islands (bvi). enacted initially in 2004 and revised across various years, this comprehensive legislation consolidates prior enactments into a structured regulatory code. it embodies principles of flexibility, efficiency, and compliance, providing businesses with a regulatory environment conducive to global commerce.

the bvibca outlines a robust framework addressing incorporation, company administration, shares and capital structures, member and director obligations, liquidation, and striking-off procedures. it offers entities significant autonomy over their operational structuring, such as the ability to define share rights, determine governance mechanisms through the memorandum and articles, and conduct seamless processes for mergers, consolidations, and even cross-border continuations. furthermore, the act establishes mechanisms for the protection of creditors’ rights and ensures transparency through mandatory filings, including updated registers of members and directors.

enhancements introduced by the 2024 amendment

with the introduction of the bvi business companies (amendment) act, 2024 (the 2024 amendments), the bvibca witnessed notable enhancements to fortify transparency, align with global standards, and modernise corporate governance. a principal advancement of the amendment is the mandatory submission and filing of registers of members and beneficial ownership information with the registrar. this development directly targets transparency, ensuring the availability of comprehensive member information, including details of nominee shareholders, thereby echoing international compliance demands and easing access for regulatory authorities. these changes also provide specific exemptions for companies listed on recognised exchanges or entities like investment funds, which are subject to comparable oversight mechanisms elsewhere.

strengthened governance and transparency

the 2024 amendments reduce the timeline for appointing directors of newly incorporated companies to 15 days, reinforcing early-stage governance structures. additionally, licensed director services are now required to be explicitly flagged in company filings, underscoring accountability and governance clarity. retaining the principle of confidentiality where necessary, the amendment balances it with transparency by allowing firms to opt for public accessibility of their beneficial ownership registers. this step aligns with growing global emphasis on open data while safeguarding the reputation of the bvi as a jurisdiction adhering to sound regulatory standards.

enhanced registrar powers and compliance obligations

operationally, the 2024 amendments establish stringent verification powers for the registrar to enhance the accuracy of corporate filings. companies are now obligated to maintain beneficial ownership records that can be easily accessed and verified by authorities. the failure to maintain these filings or comply with updated requirements carries significant ramifications, including financial penalties and, in extreme cases, striking-off actions. notably, struck-off entities seeking restoration face stringent compliance checks, satisfying outstanding obligations and filing appropriate records to resume active status.

director disclosure and transitional provisions

the scope of administrative reforms introduced under the 2024 amendments further extends to directors, particularly concerning their disclosure obligations. companies must now record director details comprehensively, including pertinent particulars of licensed entities providing director services. enhanced measures targeting compliance extend to penalties for inaccurate submissions, ensuring rigour in companies’ obligations toward administration.

crucially, the amendments complement these robust compliance mechanisms with transitional accommodations for existing entities. it allows existing companies a timeline for compliance adaptation, demonstrating fairness in implementation without diluting expectations for swift regulatory alignment.

a cohesive and evolving legislative system

together, the bvibca and the 2024 amendments present a cohesive legislative ecosystem that blends continuity and evolution. the enhanced legislation not only fortifies the bvi’s position as a globally respected financial jurisdiction but also signals its adaptability in meeting both local and global regulatory demands. these amendments embody the government of the virgin islands’ commitment to modernised transparency, accountability, and efficiency in corporate administration without compromising the bvi’s long-standing reputation as a hub for secure, confidential, and trusted international business.

further reading

• bvibca (consolidated as at 1 january 2020)
• 2024 amendments

the bvi financial investigation agency act revised edition as of 1 january 2020, is a comprehensive legal framework that establishes and governs the financial investigation agency (fia), a statutory body charged with investigating and combating financial crimes within the virgin islands. originally enacted through act 19 of 2003 and coming into force on 1 april 2004, the act has undergone several amendments to enhance its scope and efficacy, notably through acts in 2007, 2008, 2013, 2015, and 2017 (plus the further amendments outlined in detail below).

structure and leadership of the fia

the fia is introduced as a corporate body with broad powers to carry out functions aimed at uncovering and preventing the perpetuation of financial offences such as money laundering, drug trafficking-related offences, and terrorism financing. the agency operates under the guidance of a board, whose membership includes key figures such as the deputy governor or a retired judge as chairman, the attorney general as deputy chairman, the financial secretary, the commissioner of police, the commissioner of customs, the managing director of the financial services commission, and the director of the agency (who serves in this position ex officio). additionally, the steering committee, comprising the attorney general, the managing director of the commission, and the director of the fia, is tasked with overseeing and steering specific financial investigations.

core functions and powers of the fia

the act defines the primary functions of the fia as receiving, analysing, and disseminating information related to potential or actual financial offences. the agency is empowered to obtain information through disclosures required under financial services-related legislation and other enactments. notably, it can issue written directions to freeze bank accounts for up to five days, demand the production of information critical to investigations, and retain information records for at least five years. collaborating both domestically and internationally, the fia is authorised to share relevant information with law enforcement bodies and foreign financial investigation agencies. it can also enter into formal agreements with external bodies, provided such arrangements are deemed necessary by the governor.

policy framework and compliance enforcement

the board of the agency has a pivotal role in crafting the fia’s policy framework. it approves the annual budget, exercises supervisory authority over the agency, and addresses high-level policy issues. simultaneously, the steering committee serves as the operational backbone, conducting or directing investigations into financial offences, including those arising from international legal assistance requests or as stipulated by financial services laws. failure to comply with the agency’s directions, such as the provision of requested information, constitutes an offence punishable by fines, imprisonment, or both, underlining the act’s emphasis on accountability and compliance.

confidentiality and legal protections

the act establishes a robust infrastructure to protect the confidentiality of sensitive information handled by the fia. it imposes strict obligations on all connected personnel to maintain secrecy, with violations subject to criminal penalties. additionally, individuals and institutions providing information to the agency in good faith are shielded from criminal, civil, or professional liability. officers and personnel of the fia are granted immunity from lawsuits for actions performed in good faith pursuant to the act, ensuring a safe operational environment for its members.

governance and operational procedures

the governance and operation of the fia are comprehensively detailed in the accompanying schedules. schedule 1 addresses procedural matters concerning the board and the agency, including rules on meetings, quorum, decision-making processes, and the authentication of official documents. the director, appointed by the board for a renewable term not exceeding five years, is responsible for the agency’s day-to-day administration and reports to the board on the agency’s work and developments affecting public policy. clear provisions exist for performance evaluations of seconded officers and the processes for appointment, secondment, and remuneration of staff, all aimed at fostering a competent and efficient workforce.

financial autonomy and accountability

additional provisions within the act reinforce the fia’s operational autonomy and financial stability. the agency is funded through parliamentary appropriations and asset-sharing agreements, with funds deposited in a specialised “financial investigation agency asset fund”. surplus funds are further directed into a reserve account, enhancing financial resilience. the fia’s accounts undergo regular audits by the auditor general or an approved external auditor, and detailed annual reports are presented to the board and laid before the cabinet and the house of assembly for accountability.

guidelines for financial entities

the act includes provisions for the development and issuance of guidelines by the fia for financial entities, addressing the identification of suspicious transactions and the procedures for reporting them. these guidelines undergo periodic review and consultation to ensure they remain effective and reflect current trends in financial crimes. they are made freely accessible to relevant financial institutions to foster compliance and proactive measures industry-wide.

commitment to combating financial crimes

the financial investigation agency act, with its amendments and comprehensive regulatory framework, serves as a bedrock for the virgin islands’ fight against financial crimes. by implementing stringent investigatory powers, fostering collaboration, and reinforcing safeguards for confidentiality and immunity, the act highlights the government’s commitment to upholding the integrity of the financial services sector and ensuring robust mechanisms to detect, prevent, and penalise criminal financial activities.

amendments and expanded provisions

amendments introduced in 2021, 2023, and 2024 have significantly expanded the scope and powers of the fia, enhancing its ability to fulfil its mandate in an evolving global financial landscape.

• financial investigation agency (amendment) act, 2021: this amendment introduced essential updates to the definitions, functions, and powers of the fia. key new definitions included terminology such as “dnfbps” (designated non-financial businesses and professions), “npos” (non-profit organisations), “proliferation financing”, and “terrorist financing”. these additions aligned the act with international standards and addressed emerging risks related to money laundering and terrorism financing. the amendment also introduced mandatory registration and compliance monitoring for dnfbps and npos operating in high-risk areas, ensuring these entities adhere to stringent anti-financial crime regulations. furthermore, the accountability of directors and controlling stakeholders within these organisations was solidified, with the fia empowered to evaluate their fitness to hold such roles. notable structural changes included the abolition of the steering committee and the empowerment of the fia to take supervisory responsibility for dnfbps, npos, and other relevant entities. additionally, provisions were introduced requiring these entities to report organisational changes and comply with operational standards enforced by the fia.
• financial investigation agency (amendment) act, 2023: the 2023 amendment continued to enhance the fia’s international collaboration capabilities, particularly with foreign financial investigation agencies. the definition of “foreign financial investigation agency” was expanded to include entities responsible for dnfbp and npo oversight in other jurisdictions. the amendments also established formal mechanisms for the fia to provide and request feedback when sharing financial intelligence. this transparency and effectiveness in cross-border cooperation reinforced international efforts against financial crimes. furthermore, the ability of the fia to share information proactively and respond to written requests was clarified, confirming the agency’s growing emphasis on facilitating global intelligence sharing.
• financial investigation agency (amendment) act, 2024: this amendment marked the most significant expansion of the fia’s powers to date. it introduced supervisory oversight for npos at risk of misuse for terrorism financing, requiring thorough evaluations and risk assessments of these organisations. dnfbps were explicitly prohibited from operating in the territory without prior registration with the agency. the fia assumed greater enforcement authority, including the ability to suspend or revoke licences and impose substantial administrative penalties for violations. central to the 2024 changes was the introduction of a risk-based approach to supervision, enabling the fia to allocate resources efficiently based on the assessed risk profile of dnfbps and npos. new measures permitted the fia to inspect premises, review internal procedures, and assess compliance frameworks. the fia also gained the ability to issue public statements highlighting enforcement actions, as well as directing domestic and international institutions to take preventative measures. further collaboration opportunities were facilitated through enhanced disclosure powers, allowing the fia to provide support for investigations and intelligence sharing with significant safeguards to ensure confidentiality and accuracy. the 2024 amendment added new reporting requirements for dnfbps and npos, including regular submission of data related to financial crime risk assessments and governance changes. non-compliance with these directives attracted substantial fines and potential deregistration. additionally, the fia introduced detailed guidance and maintained greater transparency through published inspection reports and statutory returns.
• implementation of the 2024 amendments: on 2 january 2025, the latest amendments officially came into effect following a statutory notice by the minister of finance. with these revisions, the fia cemented its role as an essential institution in safeguarding the financial stability of the bvi. the financial investigation agency act, enhanced by its amendments, establishes a strong foundation for tackling financial offences and safeguarding the bvi’s financial system. by adopting global best practices and collaborating with international counterparts, the fia ensures that the territory remains resilient against emerging threats. through robust supervision of dnfbps and npos, the implementation of risk-based strategies, and the proactive dissemination of financial intelligence, the fia exemplifies the commitment to fostering a secure and compliant financial environment.

further reading

• virgin islands financial investigation agency act (consolidated as at 1 january 2020)
• 2021 amendments
• 2023 amendments
• 2024 amendments
• notice of the 2024 amendments

the bvi financial services commission act, revised edition 2020 (the fsc act), establishes a comprehensive framework for overseeing financial services within the bvi. it created the financial services commission (the fsc), an independent body tasked with regulating and supervising financial activities while promoting the territory’s reputation as a credible global finance centre. the act provides the legal foundation for the fsc's structure, functions, enforcement powers, and financial provisions, ensuring a robust, transparent, and adaptable regulatory environment.

the fsc’s role and responsibilities

the fsc is established as a corporate entity with perpetual succession, capable of executing its mandate independently. it supervises licensees involved in activities such as banking, trusts, insurance, and securities, while also combating financial crimes, including money laundering and terrorism financing. central to its responsibilities are granting licences, monitoring compliance, and intervening in cases of malpractice or unauthorised financial services. it also fosters consumer protection through public advisories and education initiatives.

governance and internal structure

governed by a board of commissioners, which includes the managing director and appointed experts, the fsc implements strategies and policies while maintaining high governance standards. committees such as the licensing and supervisory committee and the enforcement committee are delegated specialised functions for licensing and regulatory compliance. the internal structure ensures that duties are carried out efficiently, guided by stringent accountability measures.

enforcement powers and global cooperation

a significant component of the fsc act involves the fsc’s enforcement powers. these include investigations, issuing directives, and imposing penalties on breaches of regulatory standards. the fsc can seek court orders to protect stakeholders’ interests and promote public confidence. furthermore, its cooperation with international regulatory bodies aligns the virgin islands with global legal and financial obligations, safeguarding systemic stability and combating transnational misconduct.

financial integrity and cross-border collaboration

the fsc act emphasises financial integrity by stipulating operational funding through fees, penalties, and other income sources. transparent financial reporting and audits, alongside a substantial reserve fund, solidify its sustainability. provisions for collaborations with international regulators enhance cross-border enforcement, extending the commission’s impact beyond local boundaries.

key amendments: 2021 provisions for penalties and waivers

key amendments to the fsc act under the financial services commission (amendment) act, 2021 (the 2021 amendments) further reinforce its regulatory scope and operational efficiency. the 2021 amendments integrated detailed provisions for monetary penalties and the potential waiver of fines where failures were due to agent defaults or uncontrollable events. the introduction of section 54b established clear conditions for waiving penalties and outlined procedures to ensure fairness in compliance requirements.

key amendments: 2022 consumer protection and crisis management

the sweeping changes made under the financial services commission (amendment) act, 2022 (the 2022 amendments) expanded the fsc’s reach by instituting transparent consumer protection measures and embedding its powers within a broader crisis-management framework. enhancements included provisions for resolution proceedings against failing entities, steps to protect systemic stability, and the creation of a public register of directors and senior officers. sections addressing collaboration with domestic authorities and foreign entities were reinforced, fostering efficient information sharing. other updates, such as disqualification orders for unfit directors and extended compliance inspection authority, elevated prudential standards.

key amendments: 2023 mutual feedback mechanisms

further amendments in 2023 under the financial services commission (amendment) act, 2023 (the 2023 amendments) included the insertion of section 33g, which established “mutual feedback mechanisms” for regulatory and compliance assistance. this underscores the importance of reciprocal information flow between regulators to optimise the use of shared data and resources in enforcement.

key amendments: 2024 adaptability and governance enhancements

the financial services commission (amendment) act, 2024 (the 2024 amendments) sought to enhance the fsc’s adaptability and governance. it introduced provisions allowing decision-making during exceptional circumstances, an innovative mechanism to ensure operational continuity during crises such as natural disasters or global emergencies. other changes included a requirement that licensees adopt a risk-based supervisory approach, greater compliance obligations for financial service providers, and increased penalties for violations. the 2024 amendments also mandated all employees of the fsc to disclose personal or financial interests, fostering ethical conduct. additionally, consumer protection progressed with the inclusion of a defined consumer duty framework, holding licensees accountable to higher standards of care in their dealings with consumers.

a progressive framework for financial regulation

collectively, the fsc act and subsequent amendments from 2021 to 2024 illustrate a progressive framework that harmonises financial regulation with adaptability, equity, and responsibility. it not only regulates but also drives the development of a sophisticated financial ecosystem, positioning the bvi as a trusted jurisdiction within the global financial services landscape.

further reading

• bvibca (consolidated as at 1 january 2020)
• 2021 amendments
• 2022 amendments
• 2023 amendments
• 2024 amendments
• 2025 amendments

the bvi financing and money services act, revised as of 1 january 2020, serves as a comprehensive regulatory framework governing the financing and money services sector in the virgin islands. enacted initially in 2009 and subsequently amended in 2018, the act provides the foundation for licensing, regulation, and supervision of entities engaged in financing and money services businesses, ensuring their compliance with both financial and anti-fraud standards. it reflects the jurisdiction’s commitment to fostering a transparent, accountable financial system while protecting consumer interests.

licensing regime and prohibited unauthorised operations

central to the act is its licensing regime, which requires entities to obtain official authorisation before engaging in financing and money services activities. these activities include credit provision, financial leasing, electronic money transmission, cheque cashing, and currency exchange services. the act defines multiple classes of licences, such as class a for money transmission services and class c for financing businesses, ensuring tailored oversight and transparent operations. unauthorised operations within this space are strictly prohibited, with stringent penalties in place for non-compliance.

role of the financial services commission

the act is administered by the bvi financial services commission (fsc), which plays a crucial role in supervising the financial services sector. licensing applications are subject to rigorous scrutiny, including fit and proper assessments for directors, senior officers, and significant stakeholders. furthermore, licence holders must maintain specific capital resource thresholds to ensure financial stability and sustain their obligations.

corporate governance and compliance standards

corporate governance is another critical pillar of the legislation. the act demands that licensees establish robust management systems and internal controls commensurate with the scale and complexity of their operations. transparent financial practices, including accurate record-keeping and regular submission of audited financial statements, are mandatory. directors and senior officers shoulder explicit legal responsibilities to uphold compliance with the statutory framework, including measures to counter money laundering and terrorist financing.

consumer protection and ethical market conduct

consumer protection is a notable aspect of the act, underscoring fairness, transparency, and the safeguarding of customer funds. licensees are required to segregate customer funds for money transmission services, ensuring these funds are neither misused nor mingled with licensee assets. additionally, the law imposes ethical market conduct rules, caps on certain interest rates, and prohibits exploitative fees, ensuring fair treatment of all customers. it also regulates advertising practices, mandating that promotional materials be neither misleading nor deceptive.

supervisory powers and enforcement mechanisms

the act grants the commission extensive supervisory powers, ensuring compliance through routine audits, investigations, and reporting obligations. violations of statutory requirements, such as incomplete filings or substantial breaches of obligations, can lead to administrative penalties, licence revocation, and other enforcement actions. this ensures that the financial sector operates in line with stringent regulations and accountability standards.

2020 amendment: transaction levy introduction

key revisions introduced through subsequent amendments have reinforced the act’s effectiveness. the 2020 amendment notably introduced a transaction levy on money transmission services conducted by class a licensees for funds sent outside the virgin islands. the levy, amounting to 7 per cent of the transmitted sum, is collected at the time of the transaction and paid to a “miscellaneous purposes fund” established by the government. the fund allocates the proceeds towards specific uses like socioeconomic development projects, as outlined in the newly added schedule 3. non-compliance with levy collection attracts administrative penalties, further strengthening oversight.

2021 amendment: administrative efficiency in levy collection

the 2021 amendment refined the provisions related to this transaction levy. a new subsection required the financial services commission to retain a fixed sum of $10,000 from the levies collected before transferring the remaining amount to the miscellaneous purposes fund. this adjustment ensures administrative efficiency and provides the commission with additional resources to carry out its regulatory mandate.

2023 amendment: expanded definitions of interests

the 2023 amendment introduced essential changes to the definitions of “controlling interest” and “significant interest.” the revised definitions expanded the scope of these terms to include not only ownership exceeding specific thresholds (10 per cent in the case of significant interest and 50 per cent for controlling interest) but also the ability to exert influence over a licensee or its decisions. the amendments also adjusted related provisions requiring both significant and controlling interests to pass the fit and proper standards set by the commission. these changes reflect an emphasis on accountability for individuals and entities with substantial influence in the financial services sector, ensuring that they meet rigorous ethical and professional benchmarks.

a framework for sustainable growth and integrity

together, the financing and money services act and its amendments represent a robust legal framework tailored to the unique needs of the bvi. by fostering transparency, accountability, and consumer trust, the act reinforces the territory’s reputation as a well-regulated financial jurisdiction primed for sustainable growth and integrity in the global financial ecosystem.

further reading

• bvi financing and money services act (revised as of 1 january 2020)
• 2020 amendments
• 2021 amendments can be found
• 2022 amendments
• 2023 amendments

the bvi insurance act, as revised on 1 january 2020, establishes a robust framework for the licensing, regulation, and supervision of insurance businesses within the jurisdiction. designed to ensure financial stability and protect policyholders, the act addresses various aspects of the insurance sector, including the roles and responsibilities of insurers, insurance managers, intermediaries, and loss adjusters. guided by principles of prudence and transparency, the legislation is a critical pillar for maintaining trust in the virgin islands’ financial services industry.

foundational provisions and classifications

the act begins with foundational provisions that define key terms and classifications of insurance business. it distinguishes between domestic and foreign insurers, specifies applicable classes such as life and health or property and casualty business, and sets out licensing categories for entities engaged in insurance activities. the framework recognises six categories of insurer licences, ranging from domestic insurers authorised to underwrite local business, to reinsurers, to specialised entities handling related-party and limited-market transactions.

regulation of unauthorised insurance business

a central theme of the act is the strict regulation and supervision of unauthorised insurance business. entities must obtain the appropriate licences before carrying out insurance activities in or from the bvi. unlicensed operations are met with strict prohibitions, and both insurers and intermediaries are barred from engaging with unlicensed entities. a narrow set of exemptions may apply when local insurance capacity is demonstrably insufficient, subject to the approval of the financial services commission (fsc).

licensing process

the licensing process itself is rigorous and detailed. applicants must demonstrate compliance with financial and organisational thresholds, including the maintenance of adequate contributed capital, solvency margins, and reinsurance arrangements where required. the fsc plays an active role in reviewing and approving applications, ensuring fit and proper criteria are met by directors, senior officers, and shareholders with significant controlling interests. the act grants the fsc discretion to deny applications deemed contrary to the public interest, underscoring its mandate to uphold system integrity.

obligations on licensed insurers

once licensed, insurers are bound by comprehensive obligations to maintain financial soundness and operational discipline. the law mandates the preservation of contributed capital, adherence to prescribed solvency margins, and the proper segregation and control of funds, especially for life and health insurance providers. restrictions are placed on distributions, particularly during the initial five years of operation, unless specifically authorised by the fsc. insurers must also notify authorities immediately when any financial thresholds or regulatory requirements are breached.

corporate governance requirements

corporate governance is another key focal area. licensed insurers are required to maintain appropriate management systems with clear delineation of responsibilities among directors, senior officers, and relevant personnel. insurers must appoint and retain qualified insurance managers and actuaries, subject to fsc approval. these professionals play critical roles in ensuring the sound operation, financial stability, and compliance of insured businesses. the fsc retains oversight powers, including the ability to revoke appointments that fail to meet regulatory standards.

financial reporting and transparency

financial reporting and transparency are also prominently addressed. licensed entities must prepare and submit periodic financial statements that comply with established accounting standards. audits are mandatory in most cases, and audited statements must be filed with the fsc. furthermore, auditors and actuaries are subject to statutory obligations to report any material non-compliance or risks directly to the regulator. the act also stipulates penalties for non-compliance, holding insurers accountable for lapses in reporting, governance, and sound operation.

regulation of intermediaries and loss adjusters

the regulatory framework extends to intermediaries and loss adjusters, who must also be duly licensed to operate. similar to insurers, intermediaries are subject to capital maintenance requirements, professional indemnity obligations, and fit-and-proper standards for key personnel. they are prohibited from holding unauthorised interests in the insurers they represent, ensuring independence and integrity in their operations.

enforcement and penalties

to enforce compliance, the act grants the fsc wide-ranging powers, including the authority to conduct inspections, direct remedial actions, and impose penalties on licensees for violations. offences under the law range from engaging in unauthorised insurance business to failing to maintain adequate records or financial reserves. depending on the severity of the breach, penalties may include fines, imprisonment, suspension, or revocation of licences.

conclusion: comprehensive and balanced regulation

the virgin islands insurance act reflects a comprehensive approach to regulating a vital sector within the jurisdiction. by balancing stringent supervision with flexibility to accommodate varying business models, the legislation supports both consumer protection and the global competitiveness of the virgin islands’ insurance industry. through its provisions, the act seeks to uphold confidence and stability in a sector essential to the broader economy.

further reading

• virgin islands insurance act (consolidated as at 1 january 2020)

the bvi virtual assets service providers act, 2022 (vaspa) establishes a comprehensive framework for the registration, regulation, and supervision of virtual assets service providers (vasps). vaspa aims to ensure the integrity, security, and compliance of virtual asset transactions while addressing risks such as money laundering (ml), terrorist financing (tf) and proliferation financing (pf).

definitions and scope of the act

vaspa is divided into six parts, each addressing specific aspects of vasp operations. part i introduces vaspa, defining key terms such as “virtual assets”, “virtual assets service”, and “vasps”. it outlines the scope of vaspa, emphasising its application to entities operating within or from the british virgin islands (bvi). the financial services commission (fsc) and the financial investigation agency (fia) are granted powers to oversee compliance and enforce regulations.

registration requirements for vasps

part ii of vaspa focuses on the registration requirements for vasps. it prohibits unregistered entities from providing virtual asset services and mandates a detailed registration process. applicants must provide extensive information, including business plans, risk assessments, and compliance measures. the fsc evaluates applications based on criteria such as financial soundness, organisational structure, and the “fit and proper” status of directors and officers. registered vasps are required to maintain financial stability, appoint authorised representatives and comply with audit requirements.

general obligations and compliance standards

part iii of vaspa outlines the general obligations of vasps, emphasising transparency, record-keeping, and client asset protection. vasps must report significant changes in their operations, maintain accurate records, and safeguard client assets. they are also required to comply with applicable ml/tf/pf and sanctions regulations, adopting measures to trace and collect customer information. misleading advertisements and statements are strictly prohibited, and the fsc is empowered to enforce compliance.

custody and exchange services for virtual assets

part iv of vaspa addresses virtual asset custody and exchange services. vasps providing custody services must implement robust security measures, ensure asset segregation, and disclose risks to clients. virtual asset exchanges are subject to stringent requirements, including organisational and financial adequacy, risk mitigation, and public interest considerations. the fsc may impose conditions on exchanges, such as geographic restrictions and client eligibility criteria.

regulatory sandbox for innovation

part v of vaspa introduces the concept of a regulatory sandbox, allowing vasps to test innovative financial technologies under controlled conditions. entities seeking to participate must apply for approval and comply with the applicable sandbox regulations. the fsc may exempt sandbox participants from certain provisions of vaspa, provided they adhere to ml/tf/pf and sanctions requirements.

miscellaneous provisions and enforcement

part vi of vaspa includes miscellaneous provisions, such as the establishment of a vasp register, enforcement powers, and penalties for non-compliance. the fsc is authorised to revoke registrations, impose administrative penalties and issue directives to ensure adherence to vaspa. existing vasps operating before vaspa’s commencement should have applied for registration within six months (by july 2023) to continue their operations.

flexibility and integration with other regulations

vaspa also provides for the amendment of its schedule, enabling the cabinet to update penalties and other provisions as necessary. it integrates the regulatory code(revised edition 2020) (the rc) to enhance compliance and governance standards for vasps. specific rules relating to vasps under the rc have not yet been developed.

conclusion

in summary, vaspa represents a significant step toward regulating the virtual asset industry in the bvi. by establishing a robust legal framework, vaspa seeks to promote transparency, protect investors, and mitigate risks associated with virtual asset transactions. it underscores the bvi’s commitment to fostering a secure and compliant environment for virtual asset services and other fintech initiatives.

further reading

• vaspa

the bvi limited partnership act, revised edition 2020 (the lpa), provides a robust framework for the establishment, regulation, and operations of limited partnerships in the british virgin islands (bvi). serving as the foundation of law for these business entities, the lpa addresses essential components such as registration, governance, partner roles, financial records, and the mechanisms of both dissolution and restoration. originally introduced in 2017 and revised in 2019, the legislation has consistently emphasised structural clarity, operational flexibility, and adherence to regional and international compliance standards.

legal personality and governance framework

limited partnerships, under the lpa, may opt for legal personality, granting them a distinct status separate from their partners, or function without it, depending on their operational preferences. each partnership requires at least one general partner, liable for all debts, and one limited partner, whose liability is restricted to their contributions. central to the framework are the requirements for comprehensive partnership agreements, tailored governance models, and robust registration processes. registered agents play a pivotal role in ensuring compliance, linking partnerships with regulators, and managing requirements such as the maintenance of partner registers and financial documentation.

2023 amendments: strengthening record-keeping practices

the limited partnership (amendment) act, 2023 (the 2023 amendments), added a key compliance-focused revision to section 108 of the lpa. it formalised the requirement for the registrar to retain qualifying documents and associated information for a minimum of five years following the dissolution of a limited partnership. this amendment strengthens record-keeping practices by ensuring that critical documents remain accessible post-dissolution, facilitating oversight and supporting any retrospective validation by stakeholders or authorities. this change reflects a broader trend in regulatory policy, where alignment with international transparency and accountability norms is prioritised to maintain investor confidence.

2024 amendment: enhancing transparency and accountability

building on earlier reforms, the limited partnership (amendment) act, 2024 (the 2024 amendments), introduced sweeping changes intended to modernise the governance and operational landscape for limited partnerships. transparency took centre stage, as the 2024 amendments mandated the collection and filing of beneficial ownership information, thereby addressing international obligations related to anti-money laundering (aml) and counter-terrorist financing (cft) protocols. these requirements compel partnerships to identify individuals with significant control or interests, ensuring improved oversight and accountability at all levels of operation.

financial accountability and restoration provisions

the 2024 amendments also imposed requirements for annual financial return filings to registered agents, bringing partnerships into stricter financial accountability frameworks. enhanced record-keeping duties, combined with the registration of regular updates to partner details, ensure that authoritative records are current and reliable. new provisions relating to striking off and restoration processes provide clarity on deregistration grounds and reinforce conditions for reactivation, emphasising full compliance with updated filing and documentation obligations.

modernising administrative powers and compliance enforcement

a landmark addition introduced by the 2024 amendments was the modernisation of the registrar’s administrative powers. the new regime formalises the adoption of electronic systems for filings, making regulatory processes more efficient, user-friendly, and future-proof. penalties for non-compliance were recalibrated, reflecting a zero-tolerance stance toward violations while ensuring that deterrents appropriately balance enforcement and fairness.

a holistic approach to global market adaptation

together, the three legislative acts referred to above demonstrate the bvi’s proactive stance in adapting to the evolving needs of global markets. where the lpa created a strong legal foundation, the 2023 and 2024 amendments reinforced regulatory rigour, emphasising transparency, compliance, and operational flexibility. this holistic evolution preserves the bvi’s standing as a premier jurisdiction for limited partnerships, creating an environment that balances business opportunity with contemporary governance and accountability standards. by consistently addressing gaps and aligning with global principles, these legislative measures cement the bvi as a trusted, adaptable, and forward-thinking financial centre.

further reading

• bvibca (consolidated as at 1 january 2020)
• 2023 amendments
• 2024 amendments

the bvi proceeds of criminal conduct act, revised as of 1 january 2020, serves as a foundational legal instrument in the bvi, aimed at dismantling the financial incentives of crime by addressing the recovery and management of assets derived from illicit activities. originally enacted in 1997, the legislation has undergone numerous and significant updates, as reflected in later amendments and orders such as the 2021 and 2023 amendments, as well as the proceeds of criminal conduct (designated countries and territories) order of 1999. together, these modifications underscore the act’s adaptability to emerging challenges, particularly in the context of global financial crimes.

focus on financial integrity and modern challenges

the act’s focus lies in safeguarding the virgin islands’ financial integrity by providing robust mechanisms for identifying, confiscating, and managing proceeds linked to criminal conduct. over its history, the act has evolved to address increasingly sophisticated criminal practices, including the use of virtual assets and cross-border financial flows, as outlined in amendments such as the proceeds of criminal conduct act (amendment) acts of 2021 and 2023. the inclusion of virtual assets within the definition of property, introduced in the 2021 amendment, reflects a modern acknowledgement of the role digital economies play in contemporary financial crimes. by extending the legislative scope to encompass digital representations of value used for payments or investments, the bvi directly addresses an area prone to abuse by financial criminals.

key amendments in 2021: strengthening investigative frameworks

significant amendments in 2021 introduced key procedural enhancements. notably, section 5a established an obligation for law enforcement and the financial investigation agency (fia) to investigate related offences, such as money laundering and terrorist financing, alongside primary criminal conduct. this dual investigative approach strengthens the act’s provisions for tackling financial crimes comprehensively. furthermore, section 26a designated the fia as the sole authority responsible for receiving reports on suspicious transactions, ensuring centralised oversight, while section 26b established the national anti-money laundering and terrorist financing coordinating council. comprising senior officials, this council serves as the virgin islands’ focal point for aligning local anti-money laundering (aml) and counter-financing of terrorism (cft) policies with international standards.

2023 developments: enhanced penalties and monitoring tools

subsequent developments in 2023 further refined enforcement capabilities, with new penalties introduced to bolster compliance. key revisions included increased fines and prison terms for violations, reflecting the gravity of offences linked to money laundering and the financing of terrorism. additionally, the insertion of section 35a created a framework for account monitoring orders, compelling financial institutions to disclose specified account information, thereby bolstering investigation capabilities while ensuring transparency within financial systems.

1999 order: framework for international cooperation

the 1999 proceeds of criminal conduct (designated countries and territories) order introduced a framework for international cooperation, enabling the enforcement of external confiscation orders from designated countries. this measure reinforced the bvi’s commitment to assist foreign jurisdictions in combating criminally acquired assets. it allows external orders to be registered and enforced locally, provided they align with justice and public interest. by specifying designated countries and streamlining procedures for recognising foreign court decisions, this order facilitated cross-border efforts to restrict the movement of criminal proceeds.

core enforcement mechanisms: confiscation and restraint orders

the act remains anchored in its original intent to empower courts to issue confiscation and restraint orders for property connected to criminal conduct. confiscation orders, issued upon proof of unlawful benefits, and restraint orders, which prevent the dissipation of assets during investigations, form the backbone of its enforcement strategy. key procedural frameworks ensure that offenders are stripped not only of directly acquired proceeds but also of indirectly benefited assets, including gifts related to criminal behaviour.

accountability and reporting obligations

provisions surrounding offences such as engaging in money laundering, acquiring criminal property, and concealing illicit proceeds demonstrate the legislation’s central focus on accountability. the act criminalises tipping-off, which could compromise investigations, and imposes mandatory reporting obligations for suspicious transactions, strengthening barriers against evasion. the inclusion of training requirements within codes of practice, under the jurisdiction of the financial services commission and the joint anti-money laundering and terrorist financing advisory committee, ensures that financial institutions and professionals are well-equipped to mitigate risks.

sophisticated investigation tools and compliance measures

sophisticated investigation tools complement these statutory provisions. through amendments, the act now authorises measures like account monitoring and cash seizure mechanisms, allowing law enforcement agencies to act swiftly. furthermore, the designation of cash handling procedures, as amended by section 37a, supports the identification and tracking of money linked to criminal activities while ensuring compliance with due process.

conclusion: a resilient and forward-thinking framework

by consolidating measures against domestic and international financial misconduct, the proceeds of criminal conduct act forms a pivotal part of the bvi’s strategic initiatives to secure its financial systems from abuse. the combined impact of the 2021 and 2023 amendments, alongside earlier legislative orders, has significantly fortified the act’s reach. these cumulative efforts position the legislation as a resilient and forward-thinking framework for not only acting against financial crime but also aligning the bvi with global standards of accountability and transparency.

further reading

• bvi proceeds of criminal conduct act (consolidated as at 1 january 2020)
• 2021 amendments
• 2022 amendments
• 2023 amendments
• 1999 order

the cyprus securities and exchange commission (cysec) reminds crypto-asset service providers (casps) operating in cyprus that they must apply for authorisation under regulation (eu) 2023/1114 on markets in crypto-assets (mica) by 27 february 2026.

key points to note:

• casps operating under national rules may continue their services until their application is approved, rejected or until the transitional period ends on 1 july 2026, whichever comes first.
• casps failing to apply by the deadline must submit a wind-down plan, as they will no longer be permitted to provide crypto-asset services after 1 july 2026 without mica authorisation.
• cross-border services to other eu member states are subject to the host member state’s national legislation and to the extent that the grandfathering regime has been adopted, in accordance with esma guidance.
• casps registered under the national framework remain bound by obligations under both national rules and regulation (eu) 2023/1113.

cysec stresses the importance of a seamless transition to the mica framework to bolster confidence, transparency, and security in the crypto-asset market.

the cysec press release can be found here.

on 12 january 2026, the cyprus securities and exchange commission (cysec) issued updated consultation papers proposing amendments to the fees payable by entities under its supervision. these proposals aim to align fees with the complexity and scale of operations, reduce reliance on public resources, and enhance cysec's financial autonomy. below is a detailed analysis of the key points:

on 12 january 2026, the cyprus securities and exchange commission (cysec) issued updated consultation papers proposing amendments to the fees payable by entities under its supervision. these proposals aim to align fees with the complexity and scale of operations, reduce reliance on public resources, and enhance cysec's financial autonomy. below is a detailed analysis of the key points:

1. amendments to fees under the investment services and activities and regulated markets law (l.87(i)/2017)

the amendments apply to cyprus investment firms (cifs), market operators and branches of investment firms from other eu member states or third countries.

key changes:

• annual fees: several existing fees are to be removed as they no longer apply or have become obsolete through development of the regulatory framework. revised methodology for calculating fees, including flat fees and turnover-based increments.
• post-authorisation notifications: introduction of new notification requirements for material changes (e.g., clientele strategy, expansion to retail clients, outsourcing models) and removal of obsolete obligations.

fee adjustments:

• increased fees for applications related to cif licenses, branch establishments and algorithmic trading.
• removal of fees for cryptocurrency-related services due to the implementation of the eu's markets in crypto-assets regulation (micar).

2. fees for packaged retail and insurance-based investment products (priips)

this amendments apply to entities manufacturing, advising on or selling priips, as defined under regulation eu 1286/2014.

proposed fees:

• annual fees for priip manufacturers (eur 8,000) and advisors or sellers (eur 4,000).
• cumulative fees apply if an entity performs both roles.

fee calculation:

• entities must submit self-categorisation forms annually in september, with fees due by 30 november, to be paid in full.
• pro-rata fees apply for licences granted or withdrawn mid-year.

3. comprehensive fee review

• objective: to ensure fees reflect the operational scale and complexity of supervised entities while maintaining financial independence.
• notable proposals:
  • introduction of a maximum fee cap (eur 600,000) for cifs, third-country firms, and market operators.
  • incremental fees based on turnover thresholds, with higher percentages for larger turnovers.
  • removal of outdated fees, such as those for data reporting service providers.

implications

• for cifs and market operators: increased financial obligations, particularly for entities with higher turnovers or complex operations.
• for priip manufacturers: new annual fees may impact cost structures.
• regulatory alignment: the removal of cryptocurrency-related fees reflects harmonisation with eu regulations, reducing redundancy.

stakeholder feedback

stakeholders are encouraged to review the proposals and provide feedback within the stipulated timeframe.

deadline: responses must be submitted by 13 february 2026.

submission guidelines: responses should be concise, follow the order of questions in the consultation paper and be submitted in word format.

the press release can be found here and the consultation papers can be accessed here and here

welcome to our regulatory resources hub, a centralised guide to the core laws and compliance frameworks shaping financial services in leading jurisdictions. here, you’ll find concise summaries and direct access to key legislation from the british virgin islands, bermuda and cayman islands. whether you’re navigating licensing requirements, aml obligations, or governance standards, this section is designed to help you stay informed and compliant with ease.

explore bermuda’s core regulatory framework for financial services. stay informed on compliance essentials and licensing requirements.

discover key bvi regulatory laws and compliance requirements, your quick guide to financial services regulations in the british virgin islands.

access cayman islands regulatory laws and compliance standards. a quick resource for financial services regulations and obligations.

cyprus has abolished stamp duty with effect from 1 january 2026 under law 239(i)/2025 (the repeal law). the repeal law was published in the official gazette on 31 december 2025 and repeals the prior stamp duty laws of 1963 to 2025; instruments executed from commencement are no longer subject to stamp duty.

transition mechanics and official clarifications

on 8 january 2026 guidance from the cyprus tax department confirms treatment for “new” and “pending” documents and interim use of adhesive stamps by exception for other fee regimes until alternatives are introduced by competent authorities. in particular:

• documents drafted and signed on or after 1 january 2026 are outside stamp duty;
• documents signed (even by one party) prior to this time remain within the legacy framework and must be stamped under the pre-repeal procedures;
• authorised vendors may sell only existing stocks to stamp in-scope documents; and
• other ministries/services/departments may continue to accept existing stamps for their fees until new arrangements are promulgated.

judicial fees remain separate

the cyprus bar association (cba) has clarified, in a announcement dated 21 january 2026, that judicial fees are governed by procedural regulations under the judiciary’s constitutional authority and are unaffected by the repeal law. the cba advocates review and potential abolition of judicial fees to align with the policy of reducing financial red tape, noting practical challenges and privacy/administrative risks in proposed alternatives to stamps (e.g., bank transfers, card payments or bespoke judicial stamps). the cba has communicated this position to the judiciary and intends to engage with the ministry of finance in due course.

practical takeaways

• post-2026 execution: agreements and other instruments executed on or after 1 january 2026 no longer require stamping, streamlining closings, corporate actions and routine contracting.
• pre-2026 signatures: instruments signed by 31 december 2025 remain subject to the old framework and should be stamped per the legacy procedures.
• other fee regimes: where adhesive stamps historically evidenced fee payment to other ministries/services/departments, existing stamps may be used until successor payment channels are announced.
• sworn declarations: extrajudicial sworn declarations, including for company registry purposes, no longer attract stamp duty.
• litigation budgeting: court-related fees persist and should be modelled separately from stamp duty.

this repeal forms part of the broader 2026 tax reform and is expected to reduce transactional friction and improve ease of doing business. stakeholders should update templates and checklists accordingly, and monitor circulars for revised payment mechanisms where stamps had been used historically.

we will continue to monitor developments and offer updates as the competent authorities provide further clarification.

tax department’s announcement can be found here

the cba’s announcement (in greek) can be found here

the law repealing the stamp duties laws of 1963 to 2025, l. 239(i)/2025 can be accessed here

the bermuda proceeds of crime (anti-money laundering and anti-terrorist financing) regulations 2008, enacted under the proceeds of crime act 1997 and the anti-terrorism (financial and other measures) act 2004, establish a comprehensive framework to combat money laundering (aml) and terrorist financing (atf) within bermuda. these regulations are divided into four parts, each addressing critical aspects of compliance, enforcement, and operational procedures for relevant entities.

part 1: preliminary provisions

this section outlines the scope, definitions, and applicability of the regulations. key terms such as “beneficial owner”, “aml/atf regulated financial institution”, and “customer due diligence” are defined. the regulations apply to a wide range of entities, including financial institutions, independent professionals, casino operators, dealers in high-value goods, and real estate brokers. the concept of a “beneficial owner” is central, requiring identification of individuals with significant control or ownership in corporate entities, partnerships, trusts, or other legal arrangements.

part 2: customer due diligence (cdd)

customer due diligence is a cornerstone of the regulations, mandating entities to verify customer identities, understand ownership structures, and assess the purpose of business relationships. enhanced due diligence is required for high-risk scenarios, such as dealings with politically exposed persons (peps) or transactions involving high-risk jurisdictions. simplified due diligence may apply in low-risk cases, provided specific conditions are met. ongoing monitoring of business relationships ensures that transactions align with the customer’s profile and risk assessment. casinos are subject to additional requirements, including verifying the identity of patrons engaging in significant transactions and prohibiting anonymous accounts or transactions that could facilitate money laundering.

part 3: record-keeping, systems, and training

entities must maintain detailed records of customer identification, transactions, and due diligence measures for at least five years. these records must be sufficient to reconstruct individual transactions and support investigations. internal systems and controls are required to identify and mitigate risks, including policies for reporting suspicious activities, managing compliance, and ensuring effective communication across branches and subsidiaries. training programs are mandated to ensure employees are equipped to recognise and address money laundering and terrorist financing risks. the appointment of a compliance officer and a reporting officer is compulsory, with responsibilities for overseeing compliance programs and reporting suspicious activities to the financial intelligence agency (fia). an independent audit function must evaluate the effectiveness of aml/atf frameworks.

part 4: transfer of funds (including wire transfers)

this section governs the transfer of funds, emphasising the need for complete and accurate information on payers and payees. payment service providers (psps) must verify and retain this information, ensuring traceability of transactions. special provisions address batch file transfers, intermediary psps, and cross-border transactions. missing or incomplete information must be treated as a potential indicator of suspicious activity, warranting further investigation and possible reporting to the fia. psps are also required to implement measures to detect and address deficiencies in information accompanying transfers.

offences and penalties

non-compliance with the regulations can result in significant penalties, including fines up to us$750,000 or imprisonment for up to two years. courts consider adherence to relevant guidance issued by supervisory authorities when determining liability. entities are encouraged to take all reasonable steps and exercise due diligence to avoid violations.

schedule: simplified due diligence and politically exposed persons

the schedule provides detailed criteria for simplified due diligence, emphasising low-risk products and transactions. it also defines politically exposed persons (peps) and their associates, requiring enhanced scrutiny and monitoring of their transactions.

designation of supervisory authority: the 2012 order

complementing the 2008 regulations, the bermuda proceeds of crime (anti-money laundering and anti-terrorist financing supervision and enforcement) designation order 2012 (br 64/2012) further strengthens the supervisory framework. issued by the minister of justice under the proceeds of crime (anti-money laundering and anti-terrorist financing supervision and enforcement) act 2008, this order designates the barristers and accountants aml/atf board as a supervisory authority. this designation specifically applies to independent professionals, as defined in the 2008 regulations, ensuring that barristers and accountants adhere to aml/atf compliance standards. the order underscores bermuda’s commitment to robust oversight and enforcement mechanisms, particularly for professionals who play a critical role in financial and legal transactions.

conclusion

in summary, the bermuda proceeds of crime (aml/atf) regulations 2008, alongside the 2012 designation order, establish a robust legal framework to prevent and detect money laundering and terrorist financing. by mandating stringent due diligence, record-keeping, and reporting requirements, and by designating supervisory authorities for key sectors, these measures aim to safeguard bermuda’s financial system and uphold international standards.

further reading

• proceeds of crime (anti-money laundering and anti-terrorist financing) regulations 2008
• proceeds of crime (anti-money laundering and anti-terrorist financing supervision and enforcement) designation order 2012

on 6 january 2025, the european securities and markets authority (esma) published its third report on the marketing requirements and communications under the regulation on cross-border distribution of funds. this report, for the first time, includes statistical insights into cross-border fund marketing notifications, offering a comprehensive overview of the regulatory landscape and its practical implications.

key highlights of the report

• stability in national rules: the report reveals that national rules governing fund marketing have remained largely unchanged since the 2023 report. this stability is attributed to the harmonisation efforts driven by the transposition of the cross-border distribution of funds (cbdf) directive and the implementation of esma guidelines.
• statistical insights:
  • luxembourg and ireland dominate as the leading jurisdictions for cross-border fund notifications, accounting for 59 per cent and 30 per cent of the total, respectively.
  • ucits (undertakings for collective investment in transferable securities) represent 56 per cent of the total notifications, while alternative investment funds (aifs) make up 44 per cent.
• marketing communications:
  • the report underscores the importance of compliance with article 4 of regulation (eu) 2019/1156, which mandates that marketing communications must be fair, clear, and not misleading.
  • common breaches include unbalanced presentations of risks and rewards, misleading esg claims, and inadequate disclosure of key investor information.
• supervisory practices: while ex-ante verification of marketing communications is rare, many jurisdictions have adopted ex-post supervisory approaches, focusing on risk-based assessments.
• breaches and enforcement: examples of breaches include misleading sustainability claims, unbalanced risk-reward presentations, and inadequate accessibility to key documents like prospectuses and investor rights summaries.

implications for stakeholders

the report serves as a critical resource for fund managers, compliance officers, and legal advisors involved in cross-border fund distribution. it highlights the need for rigorous adherence to marketing communication standards and the importance of understanding jurisdiction-specific requirements.

esma will submit this report to the european parliament, the eu council, and the european commission. the findings aim to inform future regulatory adjustments and enhance the harmonisation of fund marketing practices across the eu.

esma’s press release can be accessed here and the report here

on 22 december 2025, the plenary of the cyprus house of representatives approved a comprehensive tax reform package, which is marked as the most significant cyprus tax development over the years. the new tax package was published in the official gazette of the republic of cyprus on 31 december 2025 and is effective from 1 january 2026.

this reform introduces extensive changes to the cyprus tax framework, aiming to modernise the system, enhance fairness, and boost economic competitiveness. we provide below the key features brought about by the cyprus tax reform:

1. key amendments to the income tax law of 2002 (income tax law)

• corporate tax rate: the corporate tax rate has been increased to 15 per cent (previously 12.5 per cent) to align with recent international tax developments (ie pillar ii).
• tax residency for companies: the new tax reform has removed the following condition from the cyprus tax residency test for corporations “a company must not be tax resident in another state”. double tax treaty will take precedence if it provides otherwise.
• cryptocurrency sector: profits of any person which occur from cryptocurrency distribution are now taxed at a flat rate of eight per cent.
• stock options: stock options granted under approved employer schemes are also subject to an eight per cent flat tax rate.
• tax residency for individuals (60-day rule): the new tax reform has removed the following condition from the 60-day rule tax residency test “an individual not to be tax resident in another state”.
• personal income tax: the new tax package has increased the tax-free threshold to €22,000. we provide below a table with the updated personal income tax rates based on annual income.

• new deductions: the new tax package provides new deductions for families, housing, energy-efficient upgrades, and electric vehicle purchases.

2. key amendments to the assessment and collection of taxes law of 1978 (act law)

• mandatory filings: tax resident individuals in cyprus who are over 25 years old are now obliged to submit an income tax return to the cyprus tax authorities.
• liability of directors: clear liability is established for directors for their period of tenure, including the legal safeguards demanded by the cyprus chamber of commerce and industry (ccci).
• benefits to employers: significant deductions to be granted to employers and businesses that provide cost of living allowance (cola).
• partnerships: the tax reform has introduced an obligation for partnerships to file tax returns.
• penalties: penalties and fines for breaches of the act law have been increased.

3. stamp duties

• abolition of the cyprus legislation on stamp duties: to minimise administrative costs, the new tax package provides the complete abolition of the obsolete stamp duty law of 1963.

4. key amendments to the special defence contribution law of 2002 (sdc law)

• taxation on dividends: the special defence contribution (sdc) tax rate on actual dividend distributions for cyprus tax-resident companies and cyprus tax-resident and domiciled individuals has been reduced to five per cent (previously 17 per cent).
• abolition of the deemed dividend distribution: complete abolishment of sdc on deemed dividend distribution for post-2026 profits.
• rental income: complete abolition of sdc tax on rental income.
• interest on bonds: the new package provides a reduced sdc tax rate of three per cent on interest from bonds.
• penalties: penalties and fines for breaches of the sdc law have been increased.

5. key amendments to the capital gains tax law of 1980 (cgt law)

• tax free threshold: with respect to capital gains tax, the tax-free threshold is increased to €30,000 (previously €20,000) in relation to general land sales, €50,000 (previously €30,000) in relation to sale of agricultural land by farmers and €150,000 (previously €100,000) for the sale of a primary residence.
• exemption on disposal of listed shares: the exemption on disposal of listed shares has been amended to apply shares listed on a regulated market of a recognised stock exchange (previously only on cyprus stock exchange emerging companies market).
• definition of shares: the definition of shares that own immovable property, whether directly or indirectly, was amended to include shares that derive at least 20 per cent of their value from immovable property located in cyprus.
• penalties: penalties and fines for breaches of the cgt law have been increased.

final remarks

the new tax package is aligned with the cyprus recovery and resilience plan, marking a pivotal moment in the island’s fiscal policy by providing a more beneficial and efficient tax system for both individuals and companies doing business in cyprus. it is expected to enhance cyprus' attractiveness for investment while addressing long-standing issues within the cyprus tax system.

on 23 december 2025, the cyprus securities and exchange commission (cysec) released a consultation paper to gather feedback on the implementation of the law on the establishment and operation of cypriot companies for the administration of undertakings for collective investments (l.101(i)/2025). this initiative aims to refine the regulatory framework governing entities that operate in or from cyprus and perform uci administration functions on behalf of undertakings for collective investments and ensure effective oversight. key areas of focuss include:

1. proposed fees and charges - cysec has outlined a detailed fee structure for:

• application fees: covering uci administration functions for ucits, aifs, and other investment funds, with a standard fee of eur 500 per function.
• ancillary functions: a eur 10,000 fee for holding investors' money, applicable only as a supplementary function.
• license extensions: fees for the extension of a licence to cover additional administration functions to existing licenses are charged at eur 500.
• notifications: fees for reporting material changes, such as changes to the board of directors (eur 2,000 per change) or outsourcing arrangements (eur 1,000 per notification).
• annual fees: eur 600 per administration function, with specific provisions for proportional fees in cases of mid-year license issuance or withdrawal. the annual fees are paid pro-rata to the time-period for which the authorisation is held, if authorisation is granted or withdrawn during the year.

2. material changes - the paper elaborates on what constitutes a "material change" under l.101(i)/2025, including:

• operational memoranda: significant changes to tasks among parties, procedural changes, or significant alterations to operational risk management measures outlined in the memorandum.
• indemnity insurance: changes to the provider or substantial terms of the professional indemnity insurance policy.
• outsourcing arrangements: modifications to outsourcing agreements or related terms.

3. cysec’s discretionary powers - the law grants cysec authority to further elaborate, when necessary, on provisions related to licensing, suspension and revocation of authorisations, as well as organisational requirements and conflict-of-interest management.

4. stakeholder participation - cysec encourages stakeholders, including market participants and investors, to provide their views on the proposed measures. responses must be submitted by 30 january 2026. submissions should be concise and follow the order of questions outlined in the paper.

for more information the press release can be found here and the consultation paper here

on 12 december 2025, the eu adopted council regulation (eu) 2025/2600 (the regulation), prohibiting the transfer of immobilised assets of the central bank of russia, or entities acting on its behalf, back to russia. this temporary measure is a direct response to the ongoing war of aggression against ukraine and aims to mitigate the severe economic and security challenges posed by russia's actions.

the decision underscores the eu's commitment to limiting russia's access to financial resources that could be used to escalate the conflict. in the absence of this prohibition, such resources could directly fund russia’s military operations, exacerbate hybrid threats such as cyberattacks, misinformation campaigns, and infrastructure sabotage.

key highlights of the regulation:

• scope of prohibition: the regulation bans any direct or indirect transfer of assets or reserves of the central bank of russia, including those managed by entities like the russian national wealth fund.
• temporary nature: the measures will remain in effect until russia ceases its aggression against ukraine, provides sufficient reparations to support ukraine’s reconstruction without harming the eu economy and no longer poses a serious economic threat to the eu.
• reporting obligation: a broad range of natural and legal entities, including the european central bank must disclose an array of information to the european commission including the identification of individuals or entities that hold or control relevant assets. such information must be updated every three months.
• safeguards: the regulation bars the enforcement of claims arising from contracts or transactions affected by the eu measures, where such claims are brought by the russian government, designated russian entities or persons acting on their behalf.
• economic rationale: allowing these transfers would risk prolonging the war, destabilising eu economies, and increasing fiscal burdens on member states. the eu has already faced significant economic disruptions, including energy price shocks, supply chain issues, and increased defence spending.
• broader implications: the regulation aligns with the eu’s broader strategy to strengthen resilience against hybrid threats and reduce dependency on external energy sources, as outlined in initiatives like repowereu.
• review: by 31 december 2026 and every 12 months after, the european commission will review this regulation and present a report on the main findings of that review to the eu council.

this measure highlights eu’s commitment to supporting ukraine while prioritising the economic stability and security of the union. by curbing access to key financial resources, the eu seeks to address the broader challenges posed by the ongoing conflict.

for more details, refer to the official press release here and the council regulation (eu) 2025/2600 here.

the recent enactment of the national sanctions implementation unit law 2025 (the nsiu law) and establishment of the national sanctions implementation unit (nsiu) in cyprus marks a significant milestone in the island’s sanctions enforcement regime.

for obliged entities operating in regulated sectors, understanding how the nsiu law affects your business is not just a matter of compliance, it is essential for mitigating significant financial and reputational risk.

this detailed overview is designed for "obliged entities" and their compliance professionals, focussing on obligations regarding risk management and reporting to the nsiu.

for completeness, the nsiu law also contains provisions which are of general application (not just to obliged entities). you can find a more general overview of the nsiu law here.

1. new obligations under the nsiu law

the nsiu law introduces, among other things, a set of obligations for obliged entities specifically targeting sanctions compliance. these obligations are additional to those applicable to obliged entities under the aml law or directives issued by their supervisory authorities under powers granted by the aml law.

2. what types of entities are “obliged entities” under the nsiu law?

the nsiu law borrows the concept of an “obliged entity” from the cyprus prevention and suppression of money laundering and terrorist financing law 2007 (the aml law) and includes:

• credit institutions
• financial institutions (such as investment firms, aifs, payment institutions and emis)
• administrative service providers
• crypto-asset service providers
• gambling service providers
• auditors, external accountants and tax advisors
• legal professionals (in certain cases)
• a real estate agent or intermediary in real estate rentals (for transactions above a certain threshold)
• traders in precious metals, precious stones, or high-value goods like art and cultural artefacts

3. risk management

the nsiu law requires every obliged entity to establish and implement adequate and appropriate policies, controls and procedures. the goal is to effectively identify, assess, mitigate, and manage the risks of sanctions violations and possibly actions or omissions which amount to sanctions violations.

such policies, controls and procedures must be proportionate to the characteristics and activities of the relevant obliged entity.

supervisory authorities (such as cysec, the central bank, the cyprus bar association and icpac) are empowered to issue binding regulations and directives specifying the details and method of implementation of the risk management obligations under the nsiu law, also noting that certain authorities had already issued directives with respect to sanctions and restrictive measures prior to the nsiu law.

4. mandatory reporting of possible breaches to the nsiu

a cornerstone of the new regime is the direct line of communication between obliged entities and the nsiu. obliged entities are required to report directly to nsiu any information related to potential sanctions breaches that comes into their possession or awareness in the context of their activities, subject to data protection considerations under the general data protection regulation (gdpr).

the nsiu has the authority to request, in writing, any additional information it deems necessary for its investigations.

importantly, the sanctions breach reporting obligation under nsiu law is independent of suspicious activity reporting (sar) and suspicious transaction reporting (str) obligations to the financial intelligence unit (mokas) under the aml law.

where obliged entities a case of potential sanctions violation, they must carefully assess whether a report to mokas must be under the aml law, in addition to their reporting obligations to the nsiu.

5. severe penalties for non-compliance

under the nsiu law, the nsiu is empowered to impose various administrative measures on obliged entity where they breach their risk management obligations set out in part 2 above:

• administrative fines: supervisory authorities can impose administrative fines of up to €500,000. in cases of continuing violation, an additional daily fine of €500 may be levied.
• other administrative measures: these include suspending or revoking an obliged entity’s operating licence, prohibiting permanently or temporarily individuals from holding management positions, requiring an obliged entity or an individual to cease and desist from any action amounting to a breach, and issuing public statements labelling the non-compliant entity.

separately, the breach of reporting obligations under the nsiu law may amount to a criminal offence under the law on criminal offenses and penalties for violation of union restrictive measures 2025 which transposes the provisions of eu directive 2024/1226.

overall, the establishment of the nsiu is a pivotal step in modernising the sanctions enforcement framework of cyprus and the ruleset for obliged entities aims to brings sanctions compliance mechanisms on equal footing with those under the aml law.

the nsiu law can be accessed here (in greek)

the european banking authority (eba) recently provided comprehensive advice to the european commission on six key regulatory mandates under the new anti-money laundering and countering the financing of terrorism (aml/cft) framework. this guidance includes proposals for draft regulatory technical standards (rts) and preparatory work on mandates which aim to establish a robust foundation for the operations of the new anti-money laundering authority (amla), ensuring a risk-based, proportionate and harmonised approach across the eu.

key highlights:

risk assessment methodologies:

• amla must set out how supervisors will assess and clarify the residual risk profile of each obliged entity and the frequency at which such risk profile must be reviewed.
• the eba proposes its own methodology for the calculation of residual risk recommending single, standardised and unified data points to use as risk indicators and that quantitative and objective data must be used where possible.
• the eba adopted a proportionate approach by cutting data collection requirements by 15 per cent following stakeholder feedback and new transitional measures will give both institutions and supervisors time to adjust.
• importantly, as risks vary and evolve, specific scoring thresholds and weights are not included in the draft rts. instead, it would be the role of amla to define the specific scoring thresholds and weights for each review cycle and to monitor the effective application of these indicators by supervisors in all member states.

customer due diligence (cdd):

• amla must harmonise customer due diligence requirements by specifying, by means of draft rts, which information obliged entities must collect to perform standard cdd, simplified due diligence (sdd) and enhanced due diligence (edd).
• even more amla is required to set out in the draft rts which reliable and independent sources of information obliged entities may use to verify the identities of relevant natural or legal persons.
• the scale of change introduced by the anti-money laundering regulation (amlr) could create vulnerabilities. to mitigate such risk, where possible the eba decides to build on and align with pre-existing eba works and standards.

enforcement and sanctions:

• eba provides guidelines on classifying breaches by severity and setting criteria for pecuniary sanctions, administrative measures and periodic penalty payments. this ensures consistent and proportionate enforcement across member states.
• the draft rts contain specific provisions for natural persons, including senior management and the management body in its supervisory function. holding individuals accountable for aml/cft failures is an important deterrent and an essential part of effective enforcement.

group-wide policies and procedures:

• amla must prepare a draft rts defining the minimum standards for information-sharing within groups, criteria for identifying parent undertakings and conditions for applying group-wide obligations to entities with shared ownership, management or compliance control.

next steps:

once adopted by amla and endorsed by the european commission, these instruments will aim to form the backbone of a comprehensive and resilient eu aml/cft system.

for further details eba’s press release can be found here

the european banking authority (eba) and the european securities and markets authority (esma) recently issued a joint report recommending targeted revisions to the investment firms regulation (ifr) and directive (ifd). this follows a call for advice from the european commission to assess the prudential framework for investment firms.

under articles 60 and 66 of the ifr and ifd, the european commission is required to deliver a comprehensive report to the eu council and european parliament. this report evaluates the prudential framework for investment firms and may propose legislative amendments to address any identified gaps or areas for improvement.

key recommendations:

categorisation of investment firms: proposed conditions to qualify as small and non-interconnected investment firms as well as the conditions to qualify as credit institutions.

proportionality and functionality: the framework is deemed fit-for-purpose but requires refinements to enhance proportionality and operational efficiency.

level playing field: proposals aim to ensure fair competition among investment firms and between investment firms and financial institutions performing similar activities.

consistency: improvements in calculation methodologies and threshold monitoring are suggested to ensure consistent application across the eu.

the report also addresses:

• adequacy of own funds requirements.
• implications of the banking package.
• specific considerations on commodity and emissions allowance dealers and on energy firms.
• prudential consolidation of investment firm groups.
• remuneration policies.
• interactions with other regulations, including mica, ucits and aifm directives.

next steps:

the eba and esma will submit their findings to the european commission for consideration.

for more detailed information, please see here

the british virgin islands financial services commission (bvi fsc) has extended the moratorium on filing fees for certain statutory updates until 31 march 2026, offering continued relief to eligible entities.

under the bvi business companies act (revised edition 2020), existing companies that were incorporated or continued before 2 january 2025 and are not struck off can still make the required filings under sections 41 (register of members), 43a (registration of register of members) and 96a (company to collect, keep and maintain beneficial ownership information) with a us$0 filing fee through 31 march 2026. in plain terms, these sections deal with bringing a company's core statutory records and key particulars up to date on the public register (for example, information held in statutory registers and other prescribed company details), and the moratorium lets older companies make those catch‑up filings without paying the usual fee.

similarly, under the limited partnership act (revised edition 2020), existing limited partnerships that were registered or continued before 2 january 2025 and are not struck off can make the required filings under sections 53a (registration of registers of general partners and limited partners) and 53b (limited partnership to collect, keep and maintain beneficial ownership information) with a us$0 filing fee through 31 march 2026. put simply, these sections cover filing updates to prescribed limited partnership particulars and registered records, enabling existing lps to bring their filings into line at no charge while the moratorium is in place.

for entities that are non-compliant with the framework they should work to ensure full compliance as quickly as possible so as not to impact any corporate good standing issues.

these updates were published by the bvi fsc on 31 december 2025 through industry circular 46 of 2025. for more information, readers can consult the official notice and industry circular 46, which provide additional context on the filing framework.

for further details, the official notice can be accessed here and circular 46 can be found here

on 16 december 2025, luxembourg’s commission de surveillance du secteur financier (cssf) published circular 25/900, amending circular cssf 22/811 concerning the authorisation and organisation of entities acting as uci (undertakings for collective investment) administrators.

key amendment

repeal of annex b: annex b of circular cssf 22/811 has been repealed. updated annual reporting instructions are available on the cssf’s website.

for detailed guidance, circular 25/900 can be accessed here

the bvi financial investigation agency (returns) order, 2025, has been published, introducing a structured framework for the submission of returns by designated non-financial businesses and professions (dnfbps) and non-profit organisations (npos). this order, effective from 27 november 2025, clarifies reporting obligations and establishes a clear legal context for compliance. the order, gazetted as statutory instrument no. 99 of 2025, formalises these requirements into law.

understanding its provisions is crucial for all affected entities to ensure they meet their statutory duties and avoid administrative penalties.

purpose and objectives of the order

the primary objective of the financial investigation agency (returns) order, 2025 (the order) is to streamline and formalise the process for submitting returns. made under the authority of section 5r of the financial investigation agency act, revised edition 2020, the order is designed to enhance the financial investigation agency's (fia) supervisory capabilities.

the core purposes include:

• timely submission: to facilitate the prompt preparation and filing of returns by dnfbps and npos.
• data analysis: to enable the fia to analyse statistical data, identify compliance deficiencies, and develop informed supervisory strategies.
• information requests: to allow the fia to respond efficiently to statistical inquiries and other requests for information.
• electronic filing: to facilitate a modern, electronic system for filing returns, improving efficiency and accuracy.
• fulfilling obligations: to ensure the fia can meet its obligations and undertakings as a supervisory body.

the order applies to all dnfbps and npos over which the fia exercises supervisory responsibility pursuant to section 5c of the act.

key reporting requirements

the order establishes clear and non-negotiable deadlines for the submission of returns. compliance with these timelines is mandatory for all applicable entities.

who is required to file?

every dnfbp and npo subject to the fia's supervision must file the relevant return. the specific requirements are detailed in schedule 1 for dnfbps and schedule 2 for npos.

filing deadlines

both dnfbps and npos are required to file their respective returns by 31 december each year. the return will cover the activities of the preceding calendar year. for example, the return filed by 31 december 2026, will pertain to the 2025 calendar year. this annual reporting cycle is critical for maintaining up-to-date records and facilitating ongoing risk assessment.

legal context and penalties

the order is not a standalone directive but is firmly rooted in the financial investigation agency act, revised edition 2020. this legislative backing gives the order its authority and defines the consequences of non-compliance.

penalties for non-compliance

failure to adhere to the provisions of the order constitutes a breach and exposes the dnfbp or npo to administrative penalties. these penalties are detailed in schedule 5 of the order and are designed to enforce compliance

key breaches include:

• failure to file a return: entities that do not submit their annual return by the 31 december deadline will be liable for a fine.
• failure to ensure accuracy: submitting a return that contains inaccurate or incomplete information is a contravention of the order.
• failure to notify of inaccuracies: if an entity becomes aware of an inaccuracy in a previously filed return, it must notify the agency. failure to do so is a punishable breach.

this order represents a significant step in strengthening the bvi's regulatory framework. we provide expert advice on the laws of the british virgin islands and our team is positioned to guide you through these new compliance obligations.

the bvi fia (returns) order 2025 can be found here

on 16 october 2025, the european securities and markets authority (esma) released its second consolidated report on sanctions and measures imposed in member states for 2024. here are the highlights:

sanctions overview: a total of 975 administrative sanctions and measures were imposed across 29 member states, with the value of fines exceeding €100 million. in 2023, the value of administrative fines where approximately €71 million. over 60 per cent of the sanctions imposed in 2024 were administrative fines.

top sectors: market abuse regulation (mar) and mifid ii/mifir accounted for the highest amounts of administrative fines. france and germany imposed the highest fines, with france leading at eur 29.4 million

settlements: settlement procedures accounted for 10 per cent of administrative sanctions, totalling €20m. germany issued the largest settlement fine (€12.9m) under mifid ii for algorithmic trading violations.

discrepancies across member states: enforcement varied significantly, with hungary issuing the most sanctions (182), followed by greece (93) and italy (84). some member states, like slovakia, reported minimal activity, reflecting differences in market size and enforcement practices.

sector-specific observations:

• mar: insider trading and market manipulation were the most common violations, with 259 administrative fines issued.
• mifid ii/mifir: organisational requirements, general principles and client information obligations were key areas of enforcement.
• ucits directive: 47 administrative sanctions were issued, with france imposing the highest fines (approximately €2.1 million).
• emerging regulations: no sanctions were reported under the markets in crypto-assets regulation (mica) or the securities financing transactions regulation (sftr), reflecting their recent implementation.

trends and challenges: while the total number of administrative sanctions remained stable compared to 2023, the report highlights the need for greater convergence in enforcement practices across the eu. esma emphasises that administrative sanctions are just one tool in a broader supervisory framework.

next steps: esma will continue encouraging discussions among national authorities to ensure consistent enforcement and transparency, aiming for a more integrated and effective eu financial market.

esmas news release can be found here and the report here

if you are involved in the virtual assets space in the british virgin islands, you will want to pay attention to this.

in november 2025 the bvi financial services commission (fsc) released circular 43, which includes a helpful faq document called "understanding virtual assets and vasp regulation".
think of it as your go-to guide for navigating the regulatory requirements around virtual asset activities under the virtual assets service providers act, 2022 (vasp act), which has been in effect since 1 february 2023.

what you need to know?

let's break down the key points from the guidance:

what counts as a virtual asset?

simply put, virtual assets are digital representations of value that you can use for trading, making payments, or investing – but this doesn't include traditional fiat currencies.

what activities does this cover?

if you're running exchanges, handling transfers, providing safekeeping services, or offering financial services related to virtual assets, you're likely operating as a vasp.

what do you need to do to stay compliant?

there are three main requirements:

• register with the fsc – this isn't optional.
• follow anti-money laundering (aml) and counter financing of terrorism (cft) regulations – these are critical safeguards.
• appoint compliance officers and maintain robust internal controls – you need the right people and systems in place.

what happens if you do not comply?

operating without proper registration is potentially a criminal offence and can land you with fines of up to us$100,000 or even imprisonment. the fsc isn't messing about here.

why this matters

the fsc is emphasising compliance for good reason – it's all about mitigating risks like money laundering and terrorist financing and protecting the integrity of the bvi's financial system. whether you're already operating in this space or considering entering it, understanding these requirements is essential.

for the full details, you can access circular 43 and the faqs directly from the fsc.

need help navigating vasp regulations in the bvi? get in touch with our team for tailored guidance.

for more details, access circular 43 here and the faqs here.

on 14 october 2025, the european banking authority (eba) published a comprehensive report on the growing use of white labelling in the financial services sector. this business model, where financial institutions (providers) collaborate with other entities (partners) to offer financial products under the partner's brand, is gaining traction across europe. here is a summary of the key insights:

what is white labelling?

white labelling is a business model which involves a financial institution creating a product or service (e.g., bank accounts, payment cards, loans) which is then branded and distributed by a partner, which could be a financial or non-financial entity. for instance, a retail chain might offer a branded credit card issued by a bank.

key findings

• widespread adoption: over 35 per cent of surveyed banks in 2025 reported using white labelling, with applications ranging from payment services to credit products like buy now pay later (bnpl) and open banking services.
• diverse partnerships: non-financial entities, such as digital platforms and marketplaces, are increasingly acting as partners, leveraging their customer reach to distribute financial products.
• cross-border potential: white labelling is not limited to domestic markets; it is also being used to expand services across borders.

opportunities

• cost efficiency: providers can leverage partners' infrastructure and brand visibility, reducing marketing and operational costs.
• expanded offerings: partners can offer a broader range of financial products without needing their own licenses.
• increased customer base: both providers and partners can reach new customers.
• financial inclusion: digital distribution can make financial services more accessible, especially regarding the geographic distribution and fee models.
• innovation and competition: it prompts innovation and lowers entry barriers, promoting a more dynamic financial market.

risks and challenges identified by the eba

• transparency issues: consumers may struggle to identify the actual service provider or know whom to contact for complaints.
• opacity of the cost structure: consumers may receive inaccurate, incomplete, or contradictory information and the terms and conditions applicable might not be clear.
• fraud risks: reduced clarity in roles and responsibilities can increase vulnerability to fraud. even more, fraudulent activity may occur due to weaknesses in partner cdd or oversight practices.
• regulatory complexity: supervisors face challenges in monitoring these arrangements, especially when partners are non-financial entities or operate across borders.
• operational and reputational risks: both providers and partners may face risks due to the fragmented value chain and potential misconduct by the other party.

next steps:

the eba plans to:

• enhance supervisory convergence by integrating white labelling into the 2026 union strategic supervisory priorities.
• improve consumer awareness through better disclosures about the roles of providers and partners.
• continue monitoring the evolution of white labelling through regular assessments.

eba’s press release and the reports can be found here

on 16 december 2025, luxembourg introduced draft bill no. 8669, a significant legislative proposal set to modernise the incorporation of private limited liability companies (sarls). the reform introduces greater flexibility for founders by allowing the deferred payment of the minimum share capital.

this change aims to enhance luxembourg’s competitiveness by streamlining the company formation process, addressing practical hurdles such as delays in opening bank accounts due to stringent kyc/aml checks. below is a summarised overview of what this bill entails.

key aspects of the proposed reform

this draft bill represents one of the most practical updates to luxembourg company law in recent years. here are the essential details you need to know:

• deferred payment of minimum capital: the core change allows the payment of the €12,000 minimum share capital for a sarl to be deferred for up to 12 months post-incorporation. this applies exclusively to cash contributions.
• mandatory subscription: while payment can be delayed, the requirement to fully subscribe to the entire share capital at the time of incorporation remains unchanged. founders must still commit to the full amount from day one.
• scope and exclusions: the deferral is limited to the statutory minimum. any capital subscribed above €12,000 must be fully paid up at incorporation. furthermore, contributions in kind must be fully paid up at the time of formation, as is currently the case.
• extension to sarl-s: this new flexibility is also extended to the simplified private limited liability company (société à responsabilité limitée simplifiée - sarl-s), further lowering the barrier to entry for entrepreneurs (the minimum share capital for this type of company being €1.
• alignment with european practice: the reform brings luxembourg’s framework in line with several neighbouring jurisdictions, including france and germany, removing a comparative disadvantage for company formation.

new safeguards and accountability

with increased flexibility comes a renewed focus on accountability and creditor protection.

• founder liability: the liability of founders will be aligned with the stricter regime applicable to public limited companies (sas). this includes responsibility for unpaid capital contributions.
• suspension of voting rights: as a powerful sanction, the voting rights attached to shares for which capital calls remain unpaid may be suspended until the payment is made.
• enhanced transparency: companies must publish the names of shareholders with outstanding capital contributions, along with the amounts due, in their annual accounts. this ensures full transparency for third parties.

next steps

the legislative process is underway, with the draft bill currently under review by the luxembourg parliament and the council of state. the new rules will apply to all sarls and sarl-s incorporated after the law officially enters into force.

the draft bill 8669 can be accessed here (in french).

if you manage or operate a bvi limited partnership, you should take note of an important update from the bvi financial services commission. on 19 november 2025, the fsc published circular 41, which introduces the limited partnership (financial return) order, 2025.

what does this mean for you?

starting from 1 september 2025, limited partnerships will need to submit annual financial returns to their registered agents. this requirement comes from section 54a of the limited partnership act (revised 2020) and is designed to enhance transparency and regulatory oversight.

does this apply to your partnership?

not all partnerships will need to comply with this new requirement. you may be exempt if your partnership falls into one of these categories:

• your partnership is already regulated under financial services legislation and submits financial statements to the commission; or
• your partnership files annual tax returns with financial statements to the inland revenue department

when do you need to act?

the first returns will be due from 1 january 2026 onwards, with the specific deadline depending on your partnership's fiscal year.

where can you find more information?

for complete details, you can review circular 41 and the order directly. if you have any questions about how this affects your partnership or need assistance with compliance, please don't hesitate to get in touch with us.

we're here to help you navigate these changes smoothly and ensure your partnership remains compliant with the new requirements.

for details, circular 41 can be found here and the order can be accessed here.

the government of bermuda, through the national anti-money laundering committee (namlc), released its 2024 national risk assessment (nra), marking the fourth such assessment. this comprehensive report evaluates bermuda's exposure to money laundering (ml) and terrorist financing (tf) risks, providing insights to strengthen national policies and private sector resilience.

key findings:

money laundering (ml) risks:

• high-risk areas: drug trafficking, foreign-sourced fraud, foreign-sourced market manipulation / insider training and foreign-sourced corruption/bribery remain the primary proceeds generated ml threats.
• sectoral risks: the deposit-taking, securities, trust business, corporate service provider and legal sectors are rated as having high inherent ml risks due to their international exposure and transaction volumes.
• emerging risks: the economic investment residential certificate (eirc) program, introduced in 2023, was assessed for the first time, receiving a medium ml high risk rating due to its potential exposure to high-value investments.

terrorist financing (tf) risks:

• bermuda's tf threat remains low, with no evidence of domestic or cross-border tf activities. the nonprofit sector, while assessed for tf vulnerabilities, showed no significant risks.

sectoral insights:

• digital asset businesses (dabs): rated medium-high for ml risk due to the global nature of digital assets and potential misuse for illicit activities.
• real estate: medium ml risk, influenced by foreign investments, including through the eirc program.
• nonprofit organisations (npos): low tf risk, with robust oversight and no evidence of misuse.

global cooperation:

• bermuda continues to collaborate with international bodies to address ml/tf risks, aligning with financial action task force (fatf) standards.

the findings will guide updates to bermuda's aml/atf policies, ensuring the jurisdiction remains resilient against evolving financial crimes.

for more information, the report can be found here and the press release here

on 18 november 2025, the european supervisory authorities (eba, eiopa, and esma) officially designated critical information & communication technology (ict) third-party providers (ctpps) under the digital operational resilience act (dora). this milestone strengthens the eu's financial sector's operational resilience by ensuring robust oversight of key ict service providers.

key highlights:

role of ctpps:

• these providers deliver essential ict services, including infrastructure, business, and data services, to financial entities across the eu.
• they have a pivotal role in maintaining the financial ecosystem's stability.

objective of the dora oversight framework:

• promote the sound management of ict risk by the critical providers through direct oversight engagement
• the dora framework mandates the european supervisory authorities to oversee ctpps, ensuring they implement effective risk management and governance practices.
• this oversight aims to mitigate ict risks and safeguard the eu financial sector's operational resilience.

the european supervisory authorities will continue engaging with designated ctpps through ongoing examinations to uphold these standards.

for further details, refer to esma’s news release, here and the list of designated ctpps, here

on 19 december 2025, luxembourg’s commission de surveillance du secteur financier (cssf) published circular 25/901, which became effective the same day. this circular, streamlines and modernises the regulatory framework for luxembourg's investment funds. by consolidating previous circulars and aligning provisions with practical experience, it establishes a unified and coherent set of rules for specialised investment funds (sifs), investment companies in risk capital (sicars), and part ii undertakings for collective investment (ucis).

this initiative not only simplifies compliance but also ensures that the regulatory environment remains adaptable to the diverse needs of investors and market participants. key highlights include:

• scope: applies to sifs, sicars, and part ii ucis, excluding certain fund types such as eltifs and mmfs.
• investment rules: clarifies asset concepts, risk-spreading principles, and investment limits, with flexibility for well-informed or professional investors.
• transparency: mandates clear, accurate disclosures in sales documents, covering investment policies, risks, and redemption terms.
• borrowing & techniques: sets borrowing limits and provides guidelines for efficient portfolio management techniques.
• sicar-specific rules: defines risk capital criteria, emphasising development intent, specific risks, and exit strategies.

a notable feature of the circular is its emphasis on flexibility and investor-centric provisions. for instance, it allows for tailored investment limits and derogations based on the type of investor, such as well-informed or professional investors, while maintaining robust risk-spreading principles.

additionally, the circular underscores the importance of transparency, requiring detailed and accurate disclosures in sales documents to enable investors to make informed decisions. this includes clear guidelines on investment strategies, risks, redemption terms, and borrowing limits, ensuring that funds operate with a high degree of accountability and investor protection.

by addressing key areas such as risk capital criteria for sicars, the use of portfolio management techniques, and the treatment of borrowing, the circular reflects the cssf's commitment to fostering a dynamic yet secure investment environment. it also provides transitional provisions to ensure a smooth implementation for existing funds, reinforcing its role as a forward-looking regulatory instrument designed to support the growth and stability of luxembourg's investment fund industry.

the circular 25/901 can be found here

the european union has intensified its sanctions against russia's "shadow fleet" in response to its ongoing aggression against ukraine. two recent measures highlight the eu's commitment to curbing russia's revenue streams and addressing its violations of international law.

1. sanctioning 41 vessels of the shadow fleet

on 18 december 2025, the eu imposed restrictive measures on 41 additional vessels linked to russia's shadow fleet. these vessels are accused of circumventing the oil price cap mechanism, supporting russia's energy sector, transporting military equipment, or facilitating the theft of ukrainian grain and cultural goods.

the sanctions include a port access ban and restrictions on maritime services. this brings the total number of designated vessels to nearly 600. the eu has reaffirmed its readiness to adopt further measures to pressure russia and its shadow fleet operations.

2. targeting 9 shadow fleet enablers

on 15 december 2025, the eu also sanctioned five individuals, and four entities involved in supporting russia's shadow fleet. these include businessmen linked to major russian oil companies, such as rosneft and lukoil, and shipping companies based in the uae, vietnam and russia.

the sanctions involve asset freezes, travel bans and prohibitions on eu citizens and companies providing funds to the listed parties. these measures aim to disrupt the shadow fleet's operations, which involve concealing the origin of russian oil and engaging in high-risk shipping practices.

the press releases can be found here and here

the sanctions (miscellaneous amendments) (overseas territories) order 2025 (the order) was published on 12 december 2025 and came into force on 11 december 2025. this updates the sanctions framework that applies across uk overseas territories (ukots), including the british virgin islands, cayman islands. the changes are also relevant to, by local extension, to bermuda.

an understanding of these changes are important for businesses based in the ukots to ensure they remain compliant and avoiding regulatory issues. the order ensures that sanctions regimes in the ukots remain aligned with developments under uk domestic legislation.

the order updates various existing sanctions orders to reflect recent changes made to uk sanctions regimes under the sanctions and anti-money laundering act 2018. specifically, it implements the modifications introduced by the sanctions (eu exit) (miscellaneous amendments) (no. 2) regulations 2024 in the ukots.

the key updates are as follows:

1. multiple sanctions regimes updated

the order introduces tailored updates across a wide range of uk/ukot sanctions regimes, including those targeting venezuela, north korea, russia, iran, syria, and global anti-corruption measures. these amendments are designed to close gaps and ensure consistency.

2. better information sharing

one of the main themes is enhanced financial transparency. new provisions allow relevant public authorities in the ukots to share information with the governor or an authorised officer. this strengthens the information-sharing framework needed for effective sanctions enforcement.

3. paying statutory obligations whilst under sanctions

the order clarifies how "required payments" work. it creates explicit exceptions to asset-freeze rules for payments that a designated person must make under ukot law.

this covers payments to:

• government departments
• customs and revenue authorities
• company registrars
• financial regulators
• land authorities
• consolidated funds

importantly, the amendments also allow a designated person to reimburse a non-designated person who has made such a payment on their behalf. this practical change ensures that routine legal obligations can be met without accidentally breaching asset-freeze rules.

4. keeping up with the modern economy: cryptoassets and art

the order significantly expands the definition of "relevant firm" across numerous sanctions schedules to reflect modern business realities.

the updated definition now includes:

• cryptoasset exchange providers – firms that exchange cryptoassets for money or other cryptoassets
• custodian wallet providers – firms that safeguard cryptoassets or private cryptographic keys for customers
• art market participants – firms trading in or acting as intermediaries for art sales worth €10,000 or more
• insolvency practitioners – persons administering insolvency proceedings
• letting agents – firms carrying out letting agency work

reporting to the governor

amendments have been made to direct reporting obligations towards the governor rather than the treasury in specific contexts. this streamlines the administrative process and clarifies who is responsible for oversight in the ukots.

insolvency proceedings

the order clarifies the rules around insolvency. it sets out specific conditions under which actions related to insolvency and restructuring proceedings involving a designated person can occur. the key safeguard remains: any payments made directly or indirectly to a designated person must be credited to a frozen account.

this order ensures that ukots maintain consistency with the uk's evolving sanctions framework, reinforcing the global effort to address issues like terrorism, corruption, and human rights abuses.

what should firms do next?

given the expansion of relevant firm definitions and adjusted reporting lines, organisations with activities or structures in the ots should review their sanctions screening and reporting processes. if you need support or guidance in navigating these changes, our team is available to assist.

sanctions (miscellaneous amendments) (overseas territories) order 2025 can be accessed here.

on 3 december 2025, the department for international tax cooperation (ditc) announced the activation of the country-by-country reporting (cbcr) functionality on the ditc portal. this functionality is effective as of 3 december 2025. this update is critical for multinational enterprise groups (mne groups) with cayman islands constituent entities (ces).

re-registration deadline: the ditc previously advised (on 29 august 2025) that all mne groups were required to re-register with the tax information authority (tia) via the ditc portal by 30 november 2025, prior to filing cbc reports.

key requirements:

consider classification:

• every entity resident in the cayman islands must determine whether or not it is a ce of an mne group.

filing obligations:

• ultimate parent entities (upes) resident in the cayman islands with consolidated group revenue of usd 850 million or more in the preceding fiscal year must file a cbc report.
• surrogate parent entities (spes) resident in the cayman islands where the upe is not required to file in its jurisdiction or where there is not automatic exchange agreement in place with that jurisdiction.
• reports must include jurisdictional data on revenue, taxes, employees, assets, and other financial metrics, adhering to the oecd xml schema guide.

filing deadlines:

• standard deadline: 12 months post the fiscal year-end.
• extension: for filings due between 31 july 2025, and 31 december 2025, the deadline is extended to 27 february 2026.

resources and support:

• updated guidelines are available on the ditc website.
• queries can be directed to portal@gov.kyby authorised contacts only.

ditc’s press release can be found here. for further details, access the ditc portal at https://ditcportal.secure.ky/login.

our previous blog post on this matter can be accessed here

the cayman islands monetary authority (cima) has officially implemented the virtual asset service providers (vasp) financial returns form, effective 1 december 2025. this form, accessible via the reefs system under code vfr-051-84, standardises the submission of periodic financial data for entities registered or licensed under the virtual asset (service providers) act (2024 revision).

key details include

• first deadline: 31 december 2025, for the reporting period ending 30 september 2025.
• mandatory submission: timely and accurate completion is required; no extensions will be granted.

for ease of reference, all reefs forms completion guides can be accessed here.

vasps are reminded that the timely and accurate submission of financial returns is a condition of ongoing registration or licensing and is an integral component of cima’s risk-based supervisory framework.

cima’s notices can be found here and here.

on 3 december 2025, the european commission officially added russia to its list of high-risk jurisdictions with strategic deficiencies in anti-money laundering (aml) and counter-terrorist financing (cft) frameworks. this decision follows the adoption of delegated regulation (eu) 2025/1393, which aims to amend and assess the eu aml list based on a review of third countries not listed by the financial action task force (fatf) but whose membership is suspended.

the eu commission’s technical assessment conducted using established methodologies and input from public sources, member states’ competent authorities and the european external action service, concluded that russia meets the criteria for high-risk designation. consequently, under the 4th anti-money laundering directive (4amld), eu entities must now apply enhanced vigilance in transactions involving russia to safeguard the integrity of the eu financial system.

the delegated regulation will take effect following a one-month scrutiny period by the european parliament and the council, extendable by an additional month. the eu commission will continue monitoring listed countries and relevant developments.

for further details, refer to the eu commission’s press release here.

on 3 december 2025, the european commission put forward a comprehensive package of legal proposals designed to address ukraine's ongoing budgetary and defence requirements for the years 2026 and 2027. these measures are presented as a strategic investment in european security and a mechanism to facilitate a fair and sustainable peace.

the proposals aim to provide flexible and effective financial support, adaptable to the evolving situation in ukraine. the framework is built upon two primary solutions, underpinned by a set of five legal proposals.

two proposed financing solutions

the european commission has detailed two potential solutions to structure the financial assistance:

• eu borrowing: this solution would leverage the eu budget's "headroom" to secure funds.
• reparations loan: a novel instrument, the reparations loan, would empower the eu commission to borrow against the cash balances held by eu financial institutions that originate from immobilised russian central bank assets.

these proposals are structured to operate in full compliance with european and international law, while also safeguarding the integrity of the union's financial market and the global status of the euro.

legal and protective safeguards

recognising the complexities involved, the package incorporates significant safeguards which seek to protect eu member states and financial institutions from potential retaliation measures.

in particular, such safeguards include a so-called “solidarity” mechanism, which can be supported by either bilateral national guarantees or the eu budget itself, to cover any residual risk.

key features of the package

the proposed legislative package comprises the following key elements:

• a proposed regulation to formally establish the reparations loan.
• a proposal to prohibit the transfer of immobilised russian central bank assets back to russia.
• two joint proposals to amend council regulation 833/2014, introducing critical safeguards with respect to reparations loan.
• proposed amendment to the current multi-annual financial framework (mff) to permit the use of the eu budget to underpin a loan to ukraine, which could facilitate either of the two proposed solutions.

these measures are designed not only to support ukraine's state functions and sovereignty but also to increase the cost of the ongoing conflict for russia, thereby creating a stronger incentive for engagement in peace negotiations.

the european council is expected to deliberate on these proposals and establish a clear path forward in its upcoming session on 18-19 december 2025. we are following these matters closely and will post a further blog in due course.

for more details, you can access the full press release here.

the bvi financial services commission (fsc) announced a temporary measure to help registered agents manage the current high volume of regulatory filings. on 26 november 2025, the fsc published circular 44, which grants overseas offices of registered agents temporary access to the virrgin lite platform for beneficial ownership and related filings throughout december 2025.

what does this mean for registered agents?

this initiative is designed to increase filing capacity during a period of high regulatory demand, whilst maintaining the integrity of the system. from 1 december to 31 december 2025, overseas offices will be able to submit beneficial ownership (bo), register of members (rom), register of limited partners (rolp), and register of general partners (rogp) filings directly through virrgin lite.

who is eligible?

each registered agent or affiliated entity can nominate up to 10 approved users for access. for security purposes, access will be limited to 3 static ip addresses per organisation.

it's important to note that whilst overseas offices will have direct access, the bvi offices of registered agents remain fully responsible for user management, training, and ensuring compliance.

how to apply

the application process is straightforward:

1. submit a virrgin lite subscription application
2. provide user details, static ip addresses, and confirmation of local oversight via email to bo@bvifsc.vg
3. ensure all required information is complete to avoid processing delays

as an added benefit, the fsc has waived application fees for external access during this temporary period.

important considerations

the fsc will actively monitor usage throughout the access period and reserves the right to revoke access if necessary. this underscores the importance of maintaining proper oversight and compliance standards.

for more information, circular 44 can be accessed here

on 27 november 2025, the cayman islands published two pivotal regulations aimed at improving global tax transparency: the crypto-asset reporting framework (carf) and amendments to the common reporting standard (crs). effective 1 january 2026, these regulations are designed to combat tax evasion and the misuse of virtual assets.

on 27 november 2025, the cayman islands published two pivotal regulations aimed at improving global tax transparency: the crypto-asset reporting framework (carf) and amendments to the common reporting standard (crs). effective 1 january 2026, these regulations are designed to combat tax evasion and the misuse of virtual assets.

the carf introduces automatic exchange of information on crypto-asset transactions, covering payment tokens (e.g., bitcoin, stablecoins), utility tokens, certain non-fungible tokens (nfts), and security tokens. meanwhile, the crs amendments expand its scope to include electronic money products, central bank digital currencies, and indirect crypto-asset investments. entities subject to these frameworks will begin reporting 2026 data in 2027, marking a significant step in aligning the cayman islands with international tax compliance standards.

the two regulations, tax information authority (international tax compliance) (crypto-asset reporting framework) regulations, 2025 and tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025 introduce significant updates to the cayman islands' tax compliance framework. below is a summary of key provisions:

1. crypto-asset reporting framework regulations, 2025

this regulation establishes a comprehensive framework for the automatic exchange of information related to crypto-assets, aligning with international standards set by the organisation for economic

co-operation and development (oecd). key highlights include:

scope and definitions

• cayman reporting crypto-asset service providers: entities or individuals providing crypto-asset exchange or transfer services in the cayman islands for or on behalf of customers, including making available a trading platform.
• relevant crypto-assets: digital assets excluding central bank digital currencies and specified electronic money products.
• reportable users: crypto-asset users or controlling persons residing in jurisdictions with which the cayman islands has reporting agreements.

reporting and due diligence obligations

• providers must establish written policies to identify users' tax residency(ies) and comply with due diligence procedures, and must keep records of these written policies and procedures.
• self-certifications must be collected from users to determine their tax residency(ies) by 1 january 2027 and (from 2 january 2027) prior to or upon establishing a relationship with a user.
• annual returns must be submitted by 30 june 2026, detailing reportable transactions including acquisitions, disposals and transfers of crypto-assets. if there are no reportable transactions or the provider has submitted a return in another jurisdiction, the provider must submit a nil return.

compliance and monitoring

• the tax information authority (tia) is empowered to monitor compliance, request records, and impose penalties for non-compliance.
• providers must retain records for at least six years and ensure the accuracy and adequacy of submitted information.

offences and penalties

• offences include false self-certifications, tampering with information, and hindering the authority's functions.
• penalties range from fixed fines to daily penalties for ongoing contraventions, with a maximum cap of $50,000.

2. common reporting standard (amendment) regulations, 2025

this amendment updates the existing crs framework to enhance the reporting and due diligence requirements for financial institutions. the amendments take effect on 1 january 2026, with transitional provisions for pre-existing accounts and reporting obligations. key amendments include:

reporting and compliance

• financial institutions must submit annual returns and compliance forms by 30 june of each year, detailing reportable accounts and transactions during the previous calendar year.
• self-certifications must include comprehensive information, such as tax residency, tins, and account details, for both individual and entity account holders.
• cayman financial institutions registered with the tia prior to the commencement of the 2025 amendment regulations, and which have not yet designated a principal point of contact in the cayman islands for compliance purposes, must submit a change form to the authority by 31 january 2027, notifying the authority of the individual authorised to act as their principal point of contact.

monitoring and enforcement

• the tia is authorised to verify the classification of entities and ensure the adequacy of reported information.
• institutions must retain records for six years and correct any inaccuracies identified by the tia.

penalties and appeals

• enhanced procedures for imposing penalties, including breach notices and penalty notices.
• automatic stay on enforcement of penalties during appeals, ensuring fairness in the compliance process.

definitions and scope

• expanded definitions for terms such as "accurate," "adequate," and "current" to ensure clarity in reporting obligations.
• inclusion of a definition for “change of circumstances”.
• inclusion of crypto-assets and specified electronic money products within the crs framework.

tax information authority (international tax compliance) (common reporting standard) (amendment) regulations, 2025 can be access here

tax information authority (international tax compliance) (crypto-asset reporting framework) regulations, 2025 can be found here

the press release can be accessed here

the global regulatory landscape for digital assets is constantly evolving. for entities operating within the crypto space, staying ahead of these changes is paramount. recent amendments to the common reporting standard (crs) by the oecd have significant implications for bvi crypto funds. understanding these updates is crucial for ensuring compliance and making informed strategic decisions.

the amendments have expressly expanded key definitions to bring crypto assets into the fold. this means that many bvi and other offshore crypto funds will now find themselves classified as "investment entities" and, consequently, as reporting financial institutions under the crs. what does this mean for your fund? it means new registration, due diligence, and reporting obligations.

the expanded "investment entity" test

a bvi crypto fund will likely be classified as an "investment entity" if it meets one of two tests.

1. the business activity test: this applies if the fund's primary business activity involves investing, administering or managing "relevant crypto-assets" on behalf of others (type (a). this captures most collective investment vehicles, such as hedge or crypto funds. "primarily" generally means at least 50% of gross income is derived from these activities.
2. the gross income and management test: this applies if the fund's gross income is primarily from investing or trading in relevant crypto-assets and it is managed by another financial institution (like a licensed investment manager) (type (b)).

given these broad criteria, a bvi crypto fund will almost certainly be classified as an investment entity.

relevant crypto-assets are now "financial assets"

the core change is that the definition of "financial asset" under the crs now explicitly includes any interest in a "relevant crypto-asset". this removes previous ambiguity and firmly brings entities dealing primarily in crypto-assets under the same global tax transparency standards as those dealing in traditional finance.

bvi implementation and practical consequences

the bvi implements the crs through its mutual legal assistance (tax matters) act. this requires all bvi financial institutions, including investment entities, to comply. there are no exemptions for crypto funds. the practical consequences for a bvi crypto fund classified as a reporting financial institution are significant:

• crs registration: the fund must register with the bvi's international tax authority (ita) through the bvi fars portal.
• due diligence: it must implement procedures to identify the tax residency of all investors (account holders) and their "controlling persons," which involves collecting and validating self-certification forms.
• annual reporting: the fund must report detailed information on its reportable investors to the ita by 31 may each year. this includes investor details, account values, and gross proceeds.

distinguishing crs from carf

it is crucial to differentiate the crs from the new crypto-asset reporting framework (carf). carf targets entities that provide crypto exchange services "as a business," such as exchanges and brokers.

a bvi crypto fund that simply invests in digital assets is not providing these services. therefore, it is highly unlikely to be a carf reporting entity. in fact, investment entities under crs are generally "excluded persons" for carf purposes. the fund's obligations will fall under the enhanced crs, not carf.

the path forward

the crs amendments leave little doubt: most bvi crypto funds are now reporting financial institutions with mandatory compliance obligations. fund managers must act to assess their status, register with the ita, and implement robust systems for due diligence and annual reporting.

for further guidance and support, the harneys team is here to provide the expert legal guidance needed to navigate these changes and ensure your fund remains fully compliant.

jersey has implemented the sanctions and asset-freezing (automatic implementation of uk sanctions) (jersey) amendment order 2025 (the amendment order), which came into effect on 5 december 2025.

this change ensures that prohibitions and obligations under uk sanctions listed in the sanctions order schedule 1 are automatically applied in jersey, streamlining the process and removing the need for future amendments. the minister for external relations retains the authority to modify or disapply specific sanctions. additionally, annual frozen asset reporting dates now align with jersey's financial year.

this amendment ensures that jersey's sanctions framework remains aligned with the uk, reducing administrative delays, and ensuring swift compliance with international obligations. by adopting this automatic implementation approach, jersey demonstrates its commitment to maintaining an efficient and robust sanctions regime while preserving the flexibility to address local legislative needs.

the sanctions legislation update can be found here and the sanctions and asset-freezing (automatic implementation of uk sanctions) (jersey) amendment order 2025 here

the financial action task force (fatf) recently published its updated lists of jurisdictions with strategic deficiencies in anti-money laundering and counter-terrorism financing (aml/cft) measures.

the "black list" identifies high-risk jurisdictions, including north korea, iran, and myanmar, which face enhanced due diligence and, in severe cases, countermeasures to safeguard the global financial system.

the "grey list" includes countries under increased monitoring, such as algeria, kenya, and vietnam, which are actively working to address their aml/cft shortcomings. notably, burkina faso, mozambique, nigeria, and south africa have been removed from this list, reflecting their significant progress in implementing reforms.

the bvi remains on the grey list; however, the caribbean financial action task force (cfatf), in its follow-up report, confirmed that the bvi is now rated as "compliant" or "largely compliant" with all 40 fatf recommendations.

key improvements in the bvi

the cfatf report highlights several key advancements made by the bvi to strengthen its aml/cft framework. these include:

• enhanced monitoring and risk-based supervision: improved oversight of financial institutions and designated non-financial businesses and professions (dnfbps) to ensure compliance with aml/cft standards.
• beneficial ownership transparency: better collection and maintenance of accurate and up-to-date beneficial ownership information to prevent misuse of legal entities.
• increased enforcement powers: the financial investigation agency (fia) has been granted greater authority to enforce sanctions effectively.

in a press release, the bvi government welcomed the cfatf's findings, emphasising its commitment to maintaining a transparent and trusted financial services environment.

for more details, explore the fatf’s official publication here, the cfatf’s follow-up report here, and the bvi government’s press release here.

on 13 november 2025, the cayman islands ministry of financial services and commerce, following recent consultations on the amended common reporting standard (crs) and the new crypto-asset reporting framework (carf), published and acknowledged the valuable and constructive feedback provided by industry stakeholders.

stakeholder input has been carefully considered in shaping the updated draft regulations for both frameworks. detailed consultation response documents have been published, summarising the key comments received, identifying a number of important deadlines that will take effect in 2026, and outlining the ministry’s position.

cabinet approval will be sought to enact the finalised regulations.

the crs consultation responses can be accessed here.

the carf consultation responses can be accessed here.

on 1 december 2025, the commission de surveillance du secteur financier (cssf) announced the launch of its 2025 annual aml/cft questionnaire on 23 february 2026. this initiative aims to gather standardised information on money laundering and terrorism financing risks faced by entities under cssf supervision, as well as the measures implemented to mitigate these risks.

the questionnaire is a key component of the cssf's risk-based supervision approach for combating financial crime.

key details:

• submission deadline: responses must be submitted via the cssf edesk platform by 3 april 2026.
• changes in 2025 questionnaire: updates and new questions have been incorporated, with changes clearly marked.
• responsibility for completion:
• the compliance officer in charge of the day-to-day compliance (rc) or the person responsible for overall compliance (rr) must ensure the questionnaire is completed.
• delegation to another employee or third party is permitted, but ultimate responsibility remains with the rc or rr.
• all involved must have an edesk account authenticated via luxtrust.
• api solution: the application programming interface (api) remains available for submissions, with a user guide accessible on the cssf website.

additional ad hoc questionnaire:

in the first half of 2026, the cssf will release an additional questionnaire targeting credit and financial institutions. this will collect data to assist the european anti-money laundering authority (amla) in selecting entities for direct supervision starting 1 january 2028. amla plans to directly oversee 40 entities, with the selection process occurring in 2027.

entities are encouraged to ensure their edesk accounts are active to avoid connectivity issues.

cssf’s press release can be found here

further to our blog post on uk russia sanctions, please find below an updated table of sanctions.