Building Societies Law (2020 Revision)

Summary

This is the consolidated 2020 Revision of the Cayman Islands' Building Societies Law, which sets out the framework for the incorporation, governance, regulation and dissolution of building societies (mutual savings and loan institutions) in the Cayman Islands. It has been in force in various forms since 1964, with this revision consolidating amendments up to 2019, including provisions that brought building societies under the regulatory oversight of the Cayman Islands Monetary Authority (CIMA).

The law applies to building societies incorporated under section 3, as well as their directors, senior officers, members, auditors and the Registrar of Companies.

• Incorporation: Incorporation procedures, including a 'fit and proper' assessment of proposed directors and senior officers by CIMA.
• Society rules: The content required in a society's rules.
• Interest and fines: Caps on interest rates and fines chargeable to members.
• Audits: Requirements for annual audits and statements of accounts.
• Structural changes: Procedures for amalgamation, change of name or office.
• Dispute resolution: Dispute resolution by arbitration or the Grand Court.
• Termination: Termination or dissolution of a society.
• CIMA supervisory powers: Broad supervisory powers for CIMA, including powers of search, inspection, and the ability to appoint accountants, actuaries or inspectors to examine a society's affairs.
• Offences and penalties: Offence and penalty provisions for fraud, falsification of documents, and obstruction of investigations.

Because much of the substantive detail (particularly CIMA's specific regulatory powers in sections 33-37 and detailed obligations in sections 20-22A) falls in the elided middle portion of the extracted text, this summary reflects only the provisions visible in the introductory and closing sections plus the table of contents; readers should consult the full text via the source link for complete detail on CIMA's supervisory powers and auditor obligations.

Key obligations

• Persons wishing to incorporate a building society must apply to CIMA for a determination that proposed directors and senior officers are fit and proper persons before incorporation can proceed.
• Applicants for incorporation must provide CIMA with such information as it requires, within such time as it specifies, to assess fitness and propriety of proposed directors and senior officers.
• A society's rules must expressly state that directors and senior officers are required to be fit and proper persons.
• Societies must not charge members interest on loans exceeding 12.5% per annum.
• Societies must not impose fines or penalties on members in arrears exceeding 2% per month (or part thereof), subject to an overall cap of 20%.
• Societies must conduct annual audits and provide statements of accounts/funds to members (section 21), in the form and content prescribed (section 22).
• Shares must not be issued or transferred without the prior approval of CIMA (section 15A).
• Changes of directors or senior officers must be reported/notified in accordance with section 13A.
• Rules and alterations to rules must be submitted to the Attorney General for certification.
• Auditors of societies are subject to specific obligations under section 22A.
• Officers of a society are required to give security under section 13.
• Proceedings for termination or dissolution of a society must follow the procedure set out in section 26, including issuance of a Certificate of Dissolution by the Registrar.

Applies to

building societies, directors and senior officers of building societies, members of building societies, auditors of building societies, accountants/actuaries appointed under the Law