Money Services Act (2024 Revision)

Summary

This is the consolidated and revised text of the Cayman Islands' Money Services Act, current as at 31 December 2023 (2024 Revision), which regulates persons carrying on money services business in or from the Islands — including money transmission, cheque cashing, currency exchange, and issuance/sale/redemption of money orders or traveller's cheques. It is administered by the Cayman Islands Monetary Authority (CIMA) and sets out the licensing regime, ongoing prudential and reporting requirements, and CIMA's supervisory and enforcement powers over licensees.

Licensing and Ongoing Requirements

• Licensing: Anyone carrying on money services business must hold a CIMA licence.
• Principal office: Licensees must maintain a Cayman Islands principal office.
• Net worth: Licensees must meet minimum net worth requirements.
• Records and AML: Licensees must keep proper accounting records and AML procedures.
• Reporting: Licensees must submit periodic returns and audited accounts.
• Prior approval: CIMA approval is required before certain share issuances/transfers, changes of name, or changes of principal office.

CIMA Powers and Enforcement

• Licence conditions: CIMA has broad powers to attach conditions to licences.
• Policy directions: CIMA may issue policy directions to licensees.
• Investigation and search: CIMA may investigate and search licensees.
• Summoning auditors: CIMA may summon auditors.
• Court applications: CIMA may apply to the Grand Court to protect customers' interests.
• Criminal offences: Breaches of key provisions (e.g. operating without a licence, false advertising as a money services business, non-compliance with policy directions) are criminal offences with summary conviction penalties, including continuing daily fines.

Exemptions and Fees

• Exempt entities: The Act does not apply to certain licensed banks/trust companies, building societies, or cooperative societies unless they act as agents/franchise holders of a money services business.
• Trade licence exemption: Licensed money services businesses are exempt from needing a separate Trade and Business Licensing Act licence.
• Transaction fee: A notable financial obligation is a transaction fee of 2% (capped at US$10 per transaction) of the gross amount transferred overseas, payable quarterly into government revenues, with surcharges for late payment.

Key obligations

• A person must obtain a licence from CIMA before carrying on money services business in or from the Cayman Islands.
• An applicant for a licence must have a CIMA-approved principal place of business in the Islands and must not change its name or principal office without CIMA's prior approval.
• Licensees must notify the Authority forthwith of any change in the information supplied in their licence application.
• Licensees must pay the prescribed annual licence fee (for the business and each subsidiary/branch/agency/representative office) on or before 15 January each year following the first grant of the licence, or incur a monthly surcharge of up to one-twelfth of the fee.
• Licensees must maintain at least one account approved by the Authority, or an arrangement agreed by the Authority, through which money services transactions are conducted.
• Licensees must maintain net worth of at least thirty thousand dollars (or equivalent) at all times.
• Shares totalling more than 10% of authorised or issued share capital/voting rights of a licensee company must not be issued or transferred without CIMA's prior written approval, and licensees must supply related ownership information to CIMA within the time it requires.
• Licensees must keep proper accounting records and maintain systems of business control, inspection and reporting.
• Licensees must comply with anti-money laundering procedures under section 8A.
• Licensees must submit returns and audited accounts, including an auditor's certificate, to CIMA as required by the Act.
• Auditors must give notice of resignation and licensees must notify CIMA of termination of an auditor's appointment; auditors have statutory disclosure obligations under section 14A.
• Licensees must comply with any policy directions issued by CIMA under section 30.
• Licensees must pay a transaction fee of 2% of the gross amount transferred overseas (capped at ten dollars per transaction) into government revenue, submitted quarterly in the prescribed form, subject to a monthly surcharge for late payment.
• Only licensees may represent themselves, advertise, or solicit money as carrying on money services business; non-licensees are prohibited from doing so.

Applies to

money services businesses, licensees under the Money Services Act, sub-agents of licensees, auditors of licensees, directors of licensee companies

Deadlines

• on or before every 15th day of January after the first grant of the licence: Deadline for licensees to pay the prescribed annual licence fee and fees for subsidiaries/branches/agencies/representative offices; late payment incurs a monthly surcharge.
• quarterly: Licensees must submit the 2% transaction fee on gross amounts transferred overseas on a quarterly basis in the form prescribed by the Authority.

Related documents

• Money Services Businesses (Amendment) Regulations, 2024 (SL 70 of 2024) is made under this document
• Money Services Businesses Regulations (2026 Revision) is made under this document