Securities Investment Business (Amendment) Law, 2020 (Law 16 of 2020)

Summary

This is a 2020 amending law that inserted virtual asset provisions into the Securities Investment Business Law (2020 Revision), which is the Cayman Islands' core regime for regulating securities investment business. It does not create a new licensing regime itself, but changes the definitions and scope of the existing securities investment business framework so that certain virtual assets and virtual asset trading platforms are brought within (or coordinated with) that framework, alongside the newly introduced Virtual Asset (Service Providers) Law, 2020.

• Definitions: Revises definitions of "equity interest", "listed security" and "recognised securities exchange", and adds new definitions of "fiat currency", "virtual asset" and "virtual asset trading platform".
• Recognised exchange status: Allows a virtual asset trading platform that is licensed under the Virtual Asset (Service Providers) Law, 2020 and declared by CIMA to be a recognised exchange to count as a "recognised securities exchange" or listing venue for purposes of the securities law.
• Insider dealing provisions: Extends insider dealing and "made public" provisions to dealings occurring on such platforms.
• Schedule 1 (securities): Amended to capture virtual assets that represent or are convertible into, or are derivatives of, listed securities.
• Schedule 3 (excluded activities): Amended to cover issuance, redemption or repurchase of such virtual assets.
• Licensing exemption discretion: Gives the Authority (CIMA) discretion to exempt a person from securities investment business licensing/registration where the person's activity would be better supervised under the Virtual Asset (Service Providers) Law, 2020, or where the person is already licensed under that law, subject to a requirement that an exempted person apply for a VASP licence.

It applies to securities investment business licensees and to persons carrying out virtual-asset-related activities that fall within the securities investment business framework. The law's commencement is not fixed by the text itself but is left to a future Cabinet order, which may bring different provisions into force on different dates.

Key obligations

• A licensee must list on the Exchange, or on a virtual asset trading platform licensed under the Virtual Asset (Service Providers) Law, 2020, any virtual assets that are securities under this Law and that are being issued, sold or advertised to persons in the Islands (new section 14(3)).
• Where the Authority exempts a person from securities investment business registration/licensing under new section 16(1B)(a), that person must apply for a licence under the Virtual Asset (Service Providers) Law, 2020 (new section 16(1C)).

Applies to

licensees under the Securities Investment Business Law, persons engaged in virtual asset trading platform activities, virtual asset trading platforms seeking recognition as a recognised securities exchange

Related documents

• This document amends Securities Investment Business Law (2020 Revision)
• Securities Investment Business (Amendment) Law, 2020 (Commencement) Order, 2020 (SL 136 of 2020) commences this document