CAYMAN ISLANDS Law and Practice Contributed by: Jason Ta, Ben Magahy, Paul Walters and Gemma Walters, Travers Thorp Alberga
Payments and Remittances , payment process - ing is likely to be a regulated activity requiring licensing and supervision by CIMA. A grant of such licence involves CIMA approving the licen - see’s proposed accounting processes and sys - tems of business and may be subject to such conditions and requirements as CIMA may require (including in relation to the payment rails intended to be used by the payment processor). Any material change to the application and busi - ness plan approved by CIMA could trigger the necessity for prior consent and/or a re-examina - tion by CIMA of the licensee’s business model. CIMA may refuse to grant or renew a licence if it is of the opinion that the person applying for the licence would fail to fulfil the obligations of a licensee under the law. 5.2 Regulation of Cross-Border Payments and Remittances Banks are involved in cross-border payments in the ordinary course, but in addition, cross- border payments would constitute “money ser- vices business” which is a regulated activity in the Cayman Islands pursuant to the Money Ser - vices Act. Money services business is defined as the business of providing any or all of the following services: • money transmission; • cheque cashing; • currency exchange; • the issuance, sale or redemption of money orders or traveller’s cheques; and • such other services as the governor in the Cabinet may specify by notice published in the Gazette; or • the business of operating as an agent or fran - chise holder of a business offering any or all of the services listed above.
take advice on whether such arrangements are caught by the Private Funds Act or Mutual Funds Act of the Cayman Islands. Capital Markets/Securitisations The issuance of debt instruments (eg, bonds, notes and commercial paper) by a Cayman Islands entity is not a regulated activity in and of itself in the Cayman Islands. There are, how - ever, other ancillary regulations which may apply including in relation to AML, data protection and sanctions. Deposit Taking Banking business in the Cayman Islands (which in summary is defined to mean the business of receiving and holding on deposits or other simi - lar account money which is repayable and may be invested by way of advances to customers or otherwise) is regulated in the Cayman Islands and may require a licence under the Banks and Trust Companies Act under the supervision of CIMA. 4.4 Syndication of Fiat Currency Loans At present, there is not a substantial market for the syndication of loans in the Cayman Islands, although as a general matter there is no regula - tion, prohibition or restrictions on loan syndica - tion. The jurisdiction would welcome more syn - dication of loans in the future as more and more Cayman Islands lenders are established.
5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
There are no specific prohibitions under Cay - man Islands law on creating or implementing new payment rails. That being said, as further described in 5.2 Regulation of Cross-Border
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