The Cayman Islands Monetary Authority (the “Authority”) would like to remind all businesses/persons carrying out foreign currency exchange and money transmitting services of the requirements for a license pursuant to the Money Services Act (2020 Revision) (“the MSA”). The definition of “money services business” as stated in Section 2 of the Money Services Act (2020 Revision) (“the MSA”):
“Money services business” means the business of providing, in or from within the Islands, any of the following services _
(a) Money transmission;
(b) Cheque cashing;
(c) Currency exchange;
(d) the issuance, sale or redemption of money orders or traveller’s cheques; and
(e) such other services as the Cabinet may specify by notice published in the Gazette.”
This definition therefore extends to all currency exchange activities and transfer of funds on behalf of the public by any and all means including but not limited to transfers domestically or to locations abroad by wire, cheque, draft, facsimile, or courier. This includes natural persons who conduct money transmission or currency exchange on behalf of third parties through their bank accounts. As a result, these activities are subject to licencing and regulation requirements issued by the Authority irrespective of the ‘principal’ operations of the provider of the currency exchange transaction or money transmitting service.
Any person who conducts a money services business without first obtaining an appropriate licence and is not exempted by Section 3 of the MSA, is liable to a fine and imprisonment as outlined in Section 4 of the MSA.
Applications for money services business are vetted in accordance with the index of measures for licensing, business conduct and reporting and entail a rigorous review of the applicant’s financial position, corporate governance and management structure, controls and risk management procedures. For a full range of guidelines on the licensing and regulatory requirements imposed on money services businesses, please visit https://www.cima.ky/money-services-business.
Should you have any questions, please email the Banking Supervision Division at contactbanking@cima.ky.
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Disclaimer: this publication does not constitute legal or professional advice and should not be relied on as such.