Ronan Guilfoyle
May 14, 2024

Calderwood Newsletter: Welcome Niall

Welcome Niall

We were delighted to welcome Niall O'Dowd to the Calderwood team earlier this year. Niall is extremely well known in the Cayman fund industry, having worked as a Managing Director at Waystone for the past seven years. In joining Calderwood, it’s probably no great surprise to learn that Niall is an avid golfer and he also loves travelling.

It’s been business as usual on Island, with the GAIM Ops Cayman conference taking place in April and the Calderwood team in attendance. AIMA Cayman, with Ronan as chairman, organised a members’ lunch alongside the event with regulatory updates.

Ronan’s insights were also featured in the perfORM Due Diligence Matters Newsletter, looking at valuation issues in private markets. You can read the March issue here. We’ve also been busy putting the finishing touches to our brand new website, which we are excited to share with you soon.

Modern Governance Updates

Cayman Officially Removed from EU AML List

The Cayman Islands was officially removed from the EU list of high-risk third countries with anti-money laundering, countering the financing of terrorism and counter proliferation financing (AML/CFT/CPF) deficiencies.

“The Cayman Islands Government fully understands the significance of this achievement, and what it means for our international reputation,” said the Deputy Premier and Minister for Financial Services, the Hon. André Ebanks said on the delisting which took effect on February 7 2024. “The EU’s Delegated Act states the European Commission’s assessment that, based on information including our removal from the Financial Action Task Force’s AML list, that the Cayman Islands has strengthened the effectiveness of our AML/CFT regime and addressed technical deficiencies to meet the FATF’s action plans,” he added.

Beneficial Ownership Changes Coming This Year

With changes to the Cayman Islands beneficial ownership regime due to be implemented this year, the Ministry for Financial Services and Commerce has said that Cayman entities should understand how they will be impacted by the changes. Entities previously exempt from beneficial ownership transparency requirements, including exempted limited partnerships and entities registered with CIMA under another regulatory law, will be in scope of the new regulations.

The Ministry will announce the commencement date for the Beneficial Ownership Transparency Act 2023 (the Act), and accompanying regulations, in due course. Compliance with the new elements of the beneficial ownership regime is expected to be required by 1 January 2025. Regulations and general guidance on beneficial ownership obligations are expected to be issued following industry consultation. In the meantime, the Competent Authority for Beneficial Ownership has issued technical guidance to industry stakeholders outlining how beneficial ownership filings will be completed when the Act comes into force.

If you have any questions about compliance with the new regime, please do get in touch.

DITC Tax Transparency Updates

The DITC (Department for International Tax Cooperation) Portal has opened for 2023 CRS and FATCA submissions. Registration/notification of new FI entities were due by 30 April. CRS reporting on reportable accounts, CRS filing declarations and 2023 FATCA reporting is due by 31 July. The CRS compliance form 2023 is due by 16 September.

The DITC also announced that missing date of births remain an issue in the filing of CRS returns. Some 10% of FI’s failed to report a date of birth for individual account holders and/or controlling persons. Enforcement actions will focus on returns that fail to provide accurate information.

Russia Sanctions - New Licensing Grounds (Divestment)

A new UK legislative amendment - extended to UK Overseas Territories - on divestment licensing grounds, may be helpful for Cayman funds with a sanction nexus. Cayman funds may now, in specific limited circumstances, apply for a license to divest from downstream investments (i.e. transfer funds or economic resources located in Russia) and acquire shares/interests of upstream investors (i.e. by redemption/withdrawal of sanctioned investors). Currently, this new measure has only been in force for one month and no specific guidance has been issued on how Cayman and other jurisdictions will apply the law.

VASP Consultation Conducted via GitHub

The Ministry of Financial Services has conducted an innovative legislative consultation process for proposed amendments to the Cayman Islands Virtual Asset Service Providers (VASP) Act. Public comments and feedback on the proposed legislation were solicited through the software coding platform GitHub, to foster collaboration in a more efficient manner. The Cayman Islands is updating VASP legislation to position itself at the forefront of the digital asset sector, while maintaining appropriate regulatory safeguards.

CIMA Conducts Climate Change Survey

CIMA has undertaken a survey focused on climate change and environmental-related risks in the financial sector. The survey aims to assess the prevalence of governance arrangements, risk management teams and training within regulated entities, as well as the incorporation of climate end environmental related risks into strategic planning or goals for risk mitigation.

CIMA said the initiative reflects its commitment to monitoring global developments and understanding emerging risks within the industry. The survey results will help shape initiatives and regulatory frameworks to address the challenges presented by these risks.

In our Community

We hosted the first Chartered Accountants Ireland Cayman members event in Cayman on Thursday 14 March. Thanks to everyone for attending and we look forward to expanding the programme of events. Calderwood was also featured in the Platinum Sponsor Spotlight by the IWIRC Cayman. We are delighted to continue our support of the IWIRC to support women working in insolvency and restructuring. We are also gearing up for our annual Calderwood Golf Day in May, so watch out for that soon.

Make sure you are following Calderwood on LinkedIn to keep up to date with all our events and governance updates. Click here to see the Calderwood page and hit the follow button.