HSM LAW
The ‘X Trusts’ Case – The Privy Council Confirms Protectors May Have a Substantive Fiduciary Role
On 19 March 2026, the Judicial Committee of the Privy Council delivered its judgment in A and Ors (Appellants) v C and others (Respondents) [2026] UKPC 11, overturning the Bermuda Court of Appeal and holding that the protectors of the Read more +
Cayman Immigration Law Changes Will Take Effect on 1 May 2026
On Friday, 27 March 2026, the Government announced that the “Immigration Law changes will take effect on Friday, 1 May 2026”. It appears that the Act which was passed in December 2025 and amended, prior to coming into force on Read more +
Cayman Islands Immigration Update – March 2026: Work Permit Stats and PR Factor 8 Clarity
The latest work permit statistics released by Workforce Opportunities & Residency Cayman (WORC) show that there are currently 37,075 work permits in place as of 11 March 2026. This represents a small decrease from February 2026, when 37,267 work permits Read more +
Cayman Immigration Reform: Progress, but Greater Clarity Needed
Recent immigration developments in the Cayman Islands represent meaningful progress, but they also highlight the need for greater transparency and certainty as further changes are introduced. Positive Developments: Protection for PR Holders and Applicants The Government should be applauded for Read more +
A Look into Cayman’s Proposed New Rule on the Deregistration of Private Trust Companies
On 17 August 2020, the Cayman Islands Monetary Authority (“CIMA”) wrote to the heads of several private sector associations in the Cayman Islands, including the Cayman Islands chapter of the Society of Trust and Estate Practitioners (“STEP”) seeking their views regarding a proposal to introduce a new rule which would require Cayman Islands private trust companies (“PTC’s”) to inform CIMA if they intend to cease conducting ‘trust business’ (as defined in the Banks and Trust Companies Law (2020 Revision)), and to enable CIMA to de-register any PTC that they deem to be in breach of Anti-Money Laundering Regulations or in circumstances where the directors and officers of any PTC cease to be ‘fit and proper persons’ (as defined in the Banks and Trust Companies Law (2020 Revision) (the “New Rule”).
By way of background PTC’s are permitted to act as a corporate trustee for one or more CIMA approved family connected trusts and they cannot offer their services to the general public in competition with commercial trust corporations.
HSM is at the forefront of this process as Robert Mack sits on the STEP Legislative Reform Sub-Committee and is working to provide commentary on the proposal during the prescribed consultation period.
The nub of the problem lies in the fact that while every PTC must seek the prior approval of CIMA to conduct ‘trust business’ in the Cayman Islands and to be granted PTC status prior to assuming any trusteeships, however, there is currently no mechanism to de-register a PTC if it wishes to cease conducting ‘trust business’ for whatever reason.
In addition, there is no de-registration sanction which CIMA can impose where a PTC is in breach of Anti-Money Laundering Regulations or where the persons controlling the PTC cease to be ‘fit and proper persons’ in the opinion of CIMA. The New Rule, if implemented, will allow PTC’s to be deregistered either by their own volition or by CIMA acting independently with a view to maintain compliance with Cayman Islands laws and regulations.
A PTC wishing to de-register under the New Rule will be required to submit an application to CIMA within 21 days of ceasing to carry on ‘trust business’, and such application must be supported with a License Termination/Surrender/Deregistration Form, a resolution signed by at least two directors of the PTC indicating on what date the PTC ceased carrying on ‘trust business’, together with a declaration signed by at least two directors of the PTC confirming that (1) all clients have been informed of the de-registration (2) all outstanding liabilities of the PTC have been settled (3) all outstanding complaints (if any) against the PTC have been resolved, (4) there are no pending or threatened legal proceedings against the PTC, and (5) the PTC is not acting as trustee of any trusts.
The New Rule, if implemented, should further enhance the reputation of the Cayman Islands as a well-regulated financial centre and place the jurisdiction on par with other competing onshore and offshore centres. Also, it will create a clear procedure for PTC’s wishing to voluntarily deregister and will further enhance the powers of CIMA to oversee and regulate PTC’s and is therefore a welcome enhancement to the regulatory regime of the Cayman Islands.
