Statement of Guidance - Reorganisation of Structure and Variation of Capital (Securities Investment Business)

Summary

This is a CIMA Statement of Guidance addressed to licensees carrying on securities investment business, setting out when they must notify the Authority of, or obtain its prior written consent to, changes affecting their corporate structure or capital. The guidance explains that because CIMA relies on the information submitted in a licensee's application to supervise it on an ongoing basis, any changes or proposed changes to that information must be notified to, or cleared in advance with, the Authority so it can reassess the licensee's position.

Substantively, the guidance covers four areas. For most of these events, prior written consent from CIMA is required before the transaction proceeds, while disposal or dissolution of a subsidiary instead triggers a post-event notification requirement within seven days.

• Establishing or acquiring branches and subsidiaries
• Acquiring a shareholding of 10% or more in another company
• Disposing of or dissolving a subsidiary
• Selling, merging or varying the capital structure of the licensee

The document does not state an effective date or transitional period, and its extracted text contains gaps (missing words/phrases) that affect some sentences, though the overall structure and substantive requirements remain discernible.

Key obligations

• Notify the Authority in writing of changes or proposed changes to information previously submitted to the Authority, or seek its prior consent, so the Authority can reassess the licensee's position.
• Obtain the Authority's written consent before establishing or acquiring a branch or subsidiary in the Cayman Islands or elsewhere.
• Obtain the Authority's written consent before acquiring 10% or more of the voting shares of another company.
• Notify the Authority in writing within seven days of the disposal or dissolution of a subsidiary, specifying the subsidiary's name and principal business.
• Obtain the Authority's written consent before entering into any agreement to sell or merge the whole or any part of the undertaking of the licence-holder or a third party.
• Obtain the Authority's written consent before increasing, reducing or changing the nature of its issued capital, or the rights and obligations of shareholders.

Applies to

securities investment business licensees, licence holders

Deadlines

• within seven days: A firm must notify the Authority in writing within seven days of the disposal or dissolution of a subsidiary, specifying the subsidiary's name and principal business.