The Cayman Islands Monetary Authority (CIMA) on Thursday said it is exploring a series of proposed Memoranda of Understanding (MOUs) with the Indian regulator, the Securities and Exchange Board of India (SEBI), and IFSCA, the GIFT City regulator, to share information between the regulators of both countries. Today, the Cayman Islands are the second-largest fund jurisdiction (about USD 8.5 trillion in AUM) after the US.
“These agreements aim to enhance regulatory cooperation, information exchange, and transparency, particularly in areas such as compliance and oversight of investment funds and beneficial ownership disclosure,” said Andre Ebanks, Premier of the Cayman Islands. He stated that the CIMA is considering an agreement with GIFT City’s independent regulator to foster collaboration in India’s rapidly growing financial hub.
Second MoU with SEBI under discussion
Additionally, a second MOU with SEBI is under discussion, focusing specifically on beneficial ownership transparency, a priority for both regulators in combating financial crime and ensuring investor confidence. Already in March 2011, India and the Cayman Islands signed a Tax Information Exchange Agreement (TIEA).
Alongside these MOUs, CIMA is exploring the development of a tailored regulatory framework under the Cayman Islands’ Mutual Funds Act for funds entering the Indian market. “This would involve additional compliance requirements beyond standard Cayman law, developed in consultation with SEBI, to act as a passport for easier entry into the Indian market,” said Ebanks, which would introduce additional compliance requirements to streamline entry for international investment vehicles while safeguarding investor interests.
Ebanks on Tax Haven misconception
In addressing the Tax Haven misconception, Ebanks stated that “Today, we operate on a tax‑neutral basis for investment funds, we are not a tax haven, but rather a transparent facilitator of international capital flow.” He highlighted that the Cayman Islands jurisdiction has embraced a wide range of international frameworks, including the OECD common reporting standard, UK and US FATCA, the OECD’s crypto assets framework, and EU regional standards, reinforcing its position as a transparent and responsible facilitator of global capital.
On October 27, 2023, the Cayman Islands was removed from the FATF grey list, following improvements in its anti-money laundering (AML) and counter-financing of terrorism (CFT) regimes. It has since become one of the first two guest members of FATF (Financial Action Task Force), influencing the development of new global standards for smaller nations.
Ebanks emphasised the Cayman Islands role as a facilitator of capital rather than a competitor, “We see ourselves as an assembler of capital, happy to integrate into mixed structures with Luxembourg, Singapore, Delaware, and others, to channel investment into India,” he added, who sees fostering greater transparency, cooperation, and a deeper economic relationship with India.