Statement of Guidance - Minimum Criteria for Maintaining Physical Presence for Banks (Section 6(6) BTCL)

Summary

This is a Statement of Guidance issued by the Cayman Islands Monetary Authority (CIMA) in March 2007, explaining the minimum criteria banks must meet to maintain a genuine physical presence in the Cayman Islands under section 6(6) of the Banks and Trust Companies Law (2003 Revision) (BTCL). It applies specifically to Category "B" licensed banks that are not subsidiaries or branches of a bank licensed outside the Cayman Islands (i.e., banks for which CIMA is the home regulator).

The guidance sets out expectations covering three main areas: personnel, premises/facilities, and record-keeping.

• Personnel: Banks must observe a "four eyes" principle by having a Managing Director and a Deputy Manager or support staff resident in the Cayman Islands and actively involved in daily operations, with staffing levels scaled to the size and complexity of the bank's business.
• Premises: Banks must operate from a physical address in the Cayman Islands with visible exterior identification and a prominently displayed banking licence, and maintain office space and secure facilities appropriate to their operations; smaller banks may share certain common facilities.
• Records: Banks must maintain a comprehensive set of corporate, operational, AML/KYC, client, and financial records in English (or readily convertible to English), stored at their Cayman Islands premises and made available to CIMA during on-site inspections.

Overall, the document operationalizes the statutory physical presence requirement, giving banks concrete benchmarks CIMA will use to assess compliance, and should be read alongside CIMA's related guidance on the nature, accessibility, and retention of records.

Key obligations

• Maintain a genuine place of business at a physical address in the Cayman Islands from which banking business is conducted.
• Comply at all times with the "four eyes" principle by appointing a Managing Director and a Deputy Manager or support staff able to act in the Managing Director's absence.
• Ensure the Managing Director and Deputy Manager/support staff are resident in the Cayman Islands and involved in daily operations and decision-making.
• Maintain staffing levels commensurate with the size, scope, and complexity of the bank's operations, adjusting as the business plan or activities change.
• Display exterior identification of the bank's presence at its premises.
• Prominently display the bank licence at the premises where business is conducted.
• Maintain office space and dedicated, secure, identifiable facilities (including communication equipment) commensurate with the bank's size, complexity, and nature of operations; shared facilities permitted only for smaller, less complex operations if core criteria are still met.
• Maintain records in English or in a form readily convertible to English.
• Keep at the Cayman Islands premises, in original hard copy or accessible electronic form, corporate records, minutes, policies/procedures/operating manuals (including AML/KYC), internal and external audit reports, employee training records, correspondence with CIMA and compliance monitoring records, client account and due diligence documentation, current client transaction records, general business accounts/books/files, and other records substantiating assets, liabilities, and income/expenses.
• Make all corporate records, manuals, and records outlined in section 6.2 available to CIMA during on-site inspections.

Applies to

banks holding a Category "B" licence that are not subsidiaries or branches of a bank licensed outside the Cayman Islands