Regulatory Policy - Licensing and Approving Money Services Business

Summary

This is CIMA's regulatory policy setting out the criteria the Authority applies when deciding whether to license a money services business (MSB) or approve an agent under the Money Services Law (2010 Revision) and related regulations. It is aimed at applicants seeking to conduct money services business (such as remittance and currency exchange operations) in or from the Cayman Islands, and at persons seeking approval to act as agents for a licensed principal. No money services business may be conducted in or from the Cayman Islands without CIMA's prior approval.

Licensing Criteria for MSBs

• Corporate governance: Standards for corporate governance.
• Fitness and propriety: Assessment of the fitness and propriety of controllers and management.
• Compliance appointments: Appointment of a Compliance Officer and a Money Laundering Reporting Officer.
• Group supervision: Consolidated/group supervision requirements.
• Internal systems: Internal systems and risk management standards.
• Remittance system functionality: Remittance system functionality, including AML/KYC capability and quarterly reporting capability.
• Business plan and finances: Business plan and financial resources requirements.
• Physical presence: Physical presence and premises-sharing rules.
• Record-keeping: Record-keeping expectations.

Approval Criteria for Agents

The policy also sets out separate, largely parallel criteria for approving agents.

• Principal-agent agreement: A written principal-agent agreement is required.
• Due diligence: Due diligence packages must be provided.
• Training certification: Training certification is required.
• Supporting documents: Specific supporting documents are required depending on whether the agent is a sole proprietor, partnership, individual, or corporation.

Because this is a policy statement describing licensing and approval criteria rather than a set of ongoing periodic filing obligations, most of its content operates as conditions applicants must satisfy to obtain and maintain a licence or approval, rather than recurring compliance deadlines.

Key obligations

• Money services business, whether as principal or agent, must not be conducted in or from within the Cayman Islands without CIMA's prior approval.
• Applicants must disclose ultimate beneficial owners and those exercising control, and each person holding/controlling more than a 10% interest must submit a completed due diligence package.
• Applicants must identify and obtain approval for individuals serving as Compliance Officer and/or Money Laundering Reporting Officer, submitting complete due diligence packages for each.
• Applicants' remittance systems must be capable of reporting on a quarterly basis and maintaining adequate AML/KYC functionality, including recording/transmitting transactions, security controls, audit trails, real-time tracking of outward remittances, detection of cancellations/amendments, status tracking, velocity monitoring, and exception reporting.
• If using a third-party remittance system, applicants must submit a copy of the signed agreement specifying each party's responsibilities to CIMA for approval.
• Applicants must submit a detailed business plan covering the first three years of projected business activity, including financial projections, risk management strategy, AML training plan, and operational resource details.
• Applicants must demonstrate adequate financial resources; branch/subsidiary applicants of overseas money remittance businesses must provide written confirmation of financial support from their head office/parent.
• Applicants must have a place of business in the Cayman Islands in a commercially zoned area, with proof of secured tenancy for at least one year if not owner-occupied.
• If sharing premises with other businesses, applicants must ensure physical separation of operations, controls against unauthorised access, and clearly visible signage identifying the remittance section.
• Books and records must be maintained per CIMA's Statement of Guidance on records, and CIMA may require records to be kept in the Cayman Islands as a licensing condition.
• Licence applicants must submit the prescribed fee and required documents under the Money Services Business Regulations, including financial statements for the preceding two years where applicable.
• The principal-agent relationship must be governed by a written agreement submitted to CIMA for approval, covering responsibilities, settlement arrangements, dispute resolution, regulatory compliance obligations, services, hours of operation, and termination procedures.
• Agent applicants must submit due diligence packages, training certificates, financial statements/proof of solvency, and entity-specific documents (e.g., trade and business licence, partnership agreement, certificate of incorporation) depending on their legal structure.

Applies to

money services businesses, agents of money services businesses (principal-agent relationships)