Cayman Islands funds and regulatory update H1 2025

1. New regulations on Legitimate Interest Access and Access Restrictions in the Cayman Islands beneficial ownership regime

Two new regulations have been introduced under the Beneficial Ownership Transparency Act (Revised) to support recent updates to the Cayman Islands beneficial ownership regime:

• Beneficial Ownership Transparency (Legitimate Interest Access) Regulations, 2024

• Beneficial Ownership Transparency (Access Restriction) Regulations, 2024

Legitimate Interest Access requests

Under the Legitimate Interest Access Regulations, certain members of the public can apply to the competent authority to access beneficial ownership information about a specific entity. Eligible applicants include:

• journalists or academic researchers

• representatives of civil society organisations focused on anti-money laundering or counter-terrorism financing

• individuals involved in a current or potential business relationship with the entity in question

Applicants must demonstrate a "legitimate interest", specifically that the information is needed to help prevent, detect, investigate, or prosecute money laundering or terrorism financing. Supporting evidence must be submitted with the application.

Access Restriction requests

The Access Restriction Regulations allow individuals to apply to the competent authority to prevent their beneficial ownership information from being made available, if disclosure could seriously endanger them or someone in their household (for example, risk of kidnapping, violence, extortion, or similar harm).

Eligible applicants include:

• registrable beneficial owners of an entity

• a person intending to become a registrable beneficial owner of an entity

• senior managing officials of an entity

Applications must include supporting evidence and a US$1,220 fee. The competent authority will respond within seven business days.

If an access restriction request is under review, no public access will be granted for the relevant information during that time. Approved restrictions last for three years, unless revoked earlier.

2. Amendments to Cayman Islands suspicious activity reporting regime

Under the Proceeds of Crime Act (Revised) (POCA) persons historically could rely on a defence to money laundering offences by filing a suspicious activity report (SAR). This applied to offences like:

• concealing, disguising, converting or transferring criminal property

• participating in an arrangement which the person knows or suspects involves criminal property

• acquiring or possessing criminal property

From 2 January 2025, the above "SAR defences" are only available if the SAR is filed and prior consent is obtained from the Financial Reporting Authority (FRA) before taking any action that could constitute a POCA money laundering offence. Filing a SAR alone is no longer enough — you must get FRA consent or deemed consent to avail of the "SAR defences".

The FRA has issued an industry advisory as interim guidance for SAR filers. See our client briefing, Amendments to Cayman Islands suspicious activity reporting regime now in force for more information relating to submitting a DAML / consent request and the consent (including deemed consent) regime. 

An investment fund should review, and if necessary update, its anti-money laundering (AML) compliance policies and procedures to reflect the new DAML / consent regime. As part of this review, investment funds should liaise with their money laundering reporting officer and anti-money laundering compliance officer to ensure all parties are aware of their obligations under this revised regime and aligned on strategies to avoid committing a tipping off offence if a DAML / consent request has been filed with the FRA.

3. Amendments to CIMA's audit filing extension request process

Effective 6 May 2025, CIMA made a number of changes to its audit filing extension request process. 

Key changes to this process include:

• it is now possible to apply for multiple audit filing extensions at one time: one, two or even three extensions (covering a period of up to three months after the original audit filing deadline) may be applied for at one time from CIMA. Previously, only one audit filing extension application could be submitted to CIMA at a time

• a new REEFS form has been introduced which has been enhanced to allow regulated private funds, and not just regulated mutual funds, to use CIMA's REEFS portal to submit an audit filing extension request

• the new REEFS form provides for a new deferral option – noting however that this may only be used for extenuating circumstances and would not amount to a waiver of the relevant audit requirement

See our client briefing, Update to audit filing extension requests for Cayman regulated mutual and private funds, for more information.

4. Updated CRS jurisdiction lists released by Cayman Islands Tax Authority

The Cayman Islands Tax Information Authority (TIA) has released updated lists of participating and reportable jurisdictions under the OECD's Common Reporting Standard (CRS) — a global framework for the automatic exchange of financial account information.

Key updates

The list of participating jurisdictions now includes: 

• Armenia

• Georgia

• Kazakhstan

• Moldova 

• Ukraine

The list of reportable jurisdictions (that is, jurisdictions to which financial account data may be reported) has been updated as follows:

• Saint Kitts and Nevis: reportable for filings due in 2025 and beyond

• Cameroon and Mongolia: reportable starting with 2026 filings

• Tunisia: now reportable from 2026 onwards (pushed back from 2025)

Entities operating Cayman investment fund structures should ensure their CRS compliance programmes are updated to reflect these changes, particularly for onboarding and reporting procedures.

For advice regarding any fund or regulatory matters, please contact your usual Ogier attorney or any of our key contacts listed below.