CIMA makes deal with US banking regulators
(CNS): The Cayman Islands Monetary Authority (CIMA) and the four main federal banking regulators in the United States have formalised procedures for exchanging supervisory information on US and Cayman Islands banks and banking institutions that have operations in each others’ jurisdictions. The agreement came into effect on Friday, 6 August, after several months of negotiations. According to CIMA the agreement will make it easier for both the Cayman and US regulators to access pertinent information andsupervisory assistance from each other. This in turn will facilitate more effect supervision of the entities for which they have overall responsibility, when they have operations in the other jurisdiction.
Cayman Islands Premier and Minister of Finance McKeeva Bush said the memorandum of understanding as important both from a regulatory and from a business perspective.
“This agreement will certainly enhance CIMA’s effectiveness and that of the other regulators in executing their supervisory responsibilities with regard to cross-border banking entities,” Bush stated. “For international banks and banking institutions with entities in Cayman, as well as their Cayman service providers, this is a reputational boost that should enable them to attract more business. It provides further evidence of the Cayman Islands’ commitment to sound regulation and international cooperation and shows our increasing stature as an international financial centre.”
The US agencies that are parties to the Statement of Cooperation are: the Board of Governors of the Federal Reserve System (the Board), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision (OTS).
The accord covers is the sharing of information when a Cayman Islands or US regulated bank or banking institution is seeking approval in the other jurisdiction to set up a branch, subsidiary or affiliate in that jurisdiction.
CIMA said that this means the home regulator will be aware when its entities are seeking to set up establishments in the other jurisdiction and the host regulator will know if the institution is in good regulatory standing at home, when it is considering an application for authorization
Additionally, the agreement establishes protocols for information exchange and general cooperation to facilitate ongoing consolidated supervision of these cross-border institutions as permitted by the laws of both jurisdictions.
It also sets the framework for handling confidential information on both sides.
Since CIMA’s inception it has put in place some 17 other cooperation and information exchange agreements with foreign regulators to facilitate the exercise of one of its statutory functions – that of providing assistance to overseas regulatory authorities.
CIMA Managing Director, Cindy Scotland, explained that entering into this agreement with the US banking regulators is also consistent with one of the recommendations of the IMF in its 2009 report on the Assessment of the Financial Sector Supervision and Regulation in the Cayman Islands.
“The report recommended that CIMA enter into agreements with home supervisors of international financial institutions it regulates in order to manage the risks involved in the cross border operations of such institutions,” she said. “This is something that we accepted and moved speedily to implement.”
The Statement of Cooperation with US Banking Regulators can be downloaded from theinternational agreements page of CIMA’s website at www.cimoney.com.ky.
CIMA’s other overseas information exchange and cooperation accords include agreements with authorities in the UK, Canada, Malta, Jersey, Isle of Man, Brazil, Argentina, Jamaica, Panama and member jurisdictions of the International Organisation of Securities Commissions (IOSCO). Other US regulators with which agreements exist are the Securities and Exchange Commission (SEC), State of Florida Office of Insurance Regulation, and the Office of Insurance Commissioner of the State of Washington.
Category: Business
