Internal Controls For Cayman Regulated Entities

The Cayman Islands Monetary Authority ("CIMA") has issued rules on internal controls (the "Rules") applicable to all regulated entities¹ (each an "Entity") which set out five components of internal control to be addressed by each Entity and which will take effect from 14 October 2023. The Rules are intended to ensure that the Entity has the ability to carry on its business, that its clients' assets are safeguarded, that its records are properly maintained and its financial, operational and regulatory reports are reliable and that it complies with all applicable law and regulation.

The application of the Rules is subject to a proportionality test based on the entity's size, complexity, structure, the nature of its business and its risk profile. The Rules apply across a wide range of regulated Entities and their implementation is likely to vary considerably between each class of Entity as well as between Entities within each such class as a result of