(CMR) As of 1 April 2024, company management businesses in the Cayman Islands must adhere to a new set of record-keeping guidelines published last August for newly established licensees under the Companies Management Act, Banks and Trusts Companies Act, Mutual Funds Act and Insurance Act.
The record-keeping rules have also taken effect for existing licensees; however, regulated mutual funds and private funds are exempt.
According to the Cayman Islands Monetary Authority (CIMA), records must be clear, accessible, and maintained with an appropriate system that addresses categorization, retention periods, and disposal.
The system and procedures must also comply with the Data Protection Act. Record-keeping arrangements should be reviewed annually and adjusted, especially when third parties are involved.
It also states that records must be kept in their original format for at least five years after the transaction date and longer if they relate to fiduciary-client relationships.
Adequate procedures should be established for record availability, maintenance, security, privacy, and preservation. Licensees are expected to maintain critical records, including financial, corporate, client, and due diligence documents.
Accounting records, whether in paper or electronic form, must accurately represent the regulated entity's transactions and commitments. This is necessary for CIMA to monitor compliance.
Electronic records should be of high quality, easily accessible, and protected against loss. In case of need, they should be reproducible in hard copy format. It is important to note that converting paper-based records to electronic format does not mean that the original records should be destroyed. CIMA advises against the premature destruction of paper records.
The records can be held outside the Cayman Islands, provided CIMA has access to them at all reasonable times and ‘within a reasonably short timeframe'. They must be kept in English or professionally translated into English, and CIMA must be informed of how records can be accessed once a licensee ceases to carry on business.
According to CIMA, a company manager is any entity that carries out the “business of company management.” The “business of company management” is defined in the Companies Management Act as “the provision of managerial services for profit or reward in or from within the islands, whereby a person is a director for or a shareholder of a company or when the control over the whole or substantial assets of the company is vested in the management company.”
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