Nature, Accessibility and Retention of Records – Business of Company Management – (Effective: 1 April 2024)

Back on 21 April 2023, the Statement of Guidance – Nature, Accessibility and Retention of Records was issued by CIMA, setting out clear directives for licensees involved in company management businesses (please see EventID#20778). That SOG sets out the minimum expectations for record-keeping arrangements of entities regulated or registered under the regulatory Acts in the Cayman Islands, which must be adequate to satisfy the requirements of CIMA and relevant regulations and Acts.
The SOG specifies that regulated entities are required to maintain adequate procedures for the availability, maintenance, security, privacy, and preservation of records, working papers, and documents of title belonging to the entity, clients, or others, and to review their record-keeping arrangements periodically. Regulated entities must keep proper accounting records for a minimum of five years of operation or for a time period as required under the Anti-Money Laundering Regulations, and maintain records in their original format for a minimum period of five years after the transaction date.
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Now, on 10 September 2024, CIMA posted on its website the present Rule and Statement of Guidance on the Nature, Accessibility, and Retention of Records for Licensees Conducting the Business of Company Management, dated August 2023. The document provides similar guidance as the above SOG, yet with a focus on setting minimum standards for maintaining records, establishing rules and guidance regarding the nature, accessibility, and retention of records for licensees engaged in company management.
These guidelines set minimum requirements for record maintenance, emphasizing the importance of accessibility, retention, and security. CIMA recognizes that record-keeping arrangements will differ based on the licensee’s business structure, size, complexity, and risk profile. Licensees must ensure that records are legible, accessible, and provided to the Authority promptly upon request, regardless of whether they are stored in the Cayman Islands or elsewhere.
Records must be maintained in accordance with various regulatory acts, including the Companies Act and the Anti-Money Laundering Regulations, and should include a wide range of documentation such as corporate accounting records and client communications. Licensees are required to keep records for a minimum of five years after each transaction, although longer retention periods may be necessary in certain circumstances. A robust records management program is essential, addressing categorization, retention periods, and secure disposal of records.
The guidelines also stipulate that electronic records must adhere to the same standards as paper-based records, ensuring they are accurate, complete, and easily accessible. Licensees must not rely solely on third-party records and remain responsible for compliance with all record-keeping requirements. The rules will take effect for new license applicants immediately upon publication, while existing licensees must comply by 1 April 2024.