Supervisory Circular on Crisis Management (2025-01-10)

Summary

This is a Supervisory Circular issued by CIMA on 10 January 2025 explaining why a robust crisis management framework matters for the Cayman Islands financial system and setting out CIMA's plans to implement one, particularly for systemically important regulated entities. It is primarily informational and forward-looking.

• Objectives of an effective crisis management framework: Protecting critical functions, mitigating systemic risk, maintaining stakeholder confidence, and enabling orderly resolution.
• CIMA's planned actions: Engaging stakeholders, issuing regulatory measures, coordinating with other regulators, and building recovery and resolution plan review into its supervisory activities.

The circular does not itself impose new binding rules or reporting obligations on regulated entities. Instead, it signals that CIMA intends to issue a Rule and Statement of Guidance on Recovery and Resolution Planning for industry consultation during Q1 2025, which will set out specific requirements for recovery and resolution planning applicable to regulated entities. Firms, particularly those considered systemically important, should treat this as advance notice to begin considering their own crisis management preparedness ahead of the forthcoming consultation and rules.

Applies to

regulated entities, systemically important entities

Deadlines

• first quarter of 2025: CIMA will issue a Rule and Statement of Guidance on Recovery and Resolution Planning for consultation