Money Services Business - Requirement to be Licensed (2022-12-14)

Summary

This is a public notice issued by the Cayman Islands Monetary Authority (CIMA) reminding businesses and individuals engaged in foreign currency exchange and money transmission that they must be licensed under the Money Services Act (2020 Revision) ("MSA"). It restates the statutory definition of "money services business" from Section 2 of the MSA, covering money transmission, cheque cashing, currency exchange, and the issuance/sale/redemption of money orders or traveller's cheques.

CIMA emphasizes that this definition is broad, capturing any currency exchange or fund transfer activity conducted on behalf of the public by any means (wire, cheque, draft, facsimile, courier, etc.), regardless of the provider's main line of business. It specifically notes that even natural persons who conduct money transmission or currency exchange for third parties through their own bank accounts fall within scope and require a licence, unless exempted under Section 3 of the MSA.

• Criminal offence: Operating a money services business without an appropriate licence (and without an applicable exemption) is a criminal offence carrying fines and imprisonment under Section 4 of the MSA.
• Licence vetting: Licence applications are subject to rigorous vetting covering the applicant's financial position, corporate governance, management structure, and risk controls.
• Further guidance: Readers are directed to CIMA's website and the Banking Supervision Division for further guidance.

The notice does not itself create new rules but reiterates existing licensing obligations under the MSA.

Key obligations

• Any person or business conducting money transmission, cheque cashing, currency exchange, or issuance/sale/redemption of money orders or traveller's cheques in or from the Cayman Islands must obtain a licence under the Money Services Act (2020 Revision) unless exempted under Section 3 of the MSA.
• Natural persons conducting money transmission or currency exchange on behalf of third parties through their own bank accounts must also be licensed unless exempted.
• Applicants for a money services business licence must undergo CIMA's review of their financial position, corporate governance, management structure, and risk management/controls as part of the licensing process.

Applies to

money services businesses, persons/businesses carrying out foreign currency exchange and money transmitting services