The Cayman Islands Monetary
Authority and four US federal banking regulators have agreed on procedures for
the exchange of supervisory information on banks operating in the US and the
After several months of
negotiations, the agreement became effective on 6 August.
It should make it easier for both
the Cayman and US regulators to access information and obtain supervisory
assistance from each other.
The objective is to more
effectively supervise entities that have operations in both jurisdictions.
The accord entails, among others,
the sharing of information on regulated banks seeking the approval to set up a
branch, subsidiary or affiliate in the other jurisdiction.
This will alert the home regulator
of entities seeking to set up establishments in the other jurisdiction and the
host regulator will know when it is considering an application for
authorisation, if the institution is in good regulatory standing at home.
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.
Many cooperation agreements
It also sets the framework for
handling confidential information on both sides.
The US agencies that are parties to
the Statement of Cooperation include the Board of Governors of the Federal
Reserve System, the Office of the Comptroller of the Currency, the Federal
Deposit Insurance Corporation and the Office of Thrift Supervision.
CIMA has agreed a total of 17
cooperation and information exchange agreements with foreign regulators to
facilitate the provision of 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 given by the
International Monetary Fund 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.”
Cayman Islands Premier and Minister
of Finance McKeeva Bush said the memorandum of understanding is 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,” he said.
“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
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,” Mr.
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.
Other US regulators that CIMA has
entered into agreements with are the Securities and Exchange Commission, the
State of Florida Office of Insurance Regulation and the Office of Insurance
Commissioner of the State of Washington.