Monetary Authority on track for 2004

Cindy Scotland, Managing 
Director of the Cayman 
Islands Monetary Authority

Monday, February 23, 2004

After a review of the year 2003, the Cayman Islands Monetary Authority says key developments have it well positioned to meet the challenges of 2004, and to advance its mission to foster a thriving, competitive, and internationally-recognised financial services industry.

"The Authority is proud of its accomplishments and going forward will capitalise on them to steer Cayman's financial services industry to its greatest potential," said the Authority's Cindy Scotland.

The Authority became operationally independent in March 2003 with the adoption of the new Monetary Authority Law (2003 Revision). Highlights of independence included the establishment of an independent board with the power to approve and revoke licences of financial service providers and to issue currency. The Law also established a management committee having the responsibility for carrying out the principle functions of the Authority. 

As part of the Authority's increased independence, the Law has also strengthened its accountability to the government and the public. The Law established the responsibilities of directors when they encounter a conflict of interest between their duties to the Authority and duties to private sector interests. 

The inaugural issue of the Regulatory Handbook, a practical guide to the workings of the Authority, was issued in September 2003. The handbook will be amended periodically to reflect new regulatory developments.

Much of the Authority's efforts during the first half of the year were directed toward preparing for a September visit from the International Monetary Fund (IMF), whose nine-member team was tasked to assess the standards of supervision and regulation of Cayman's financial sector. 

The preliminary report indicated that, in most areas, supervision complied with international standards and that there was a developed compliance culture within Cayman's financial industry. The IMF is expected to issue its final report in mid-2004.

Mid-year the board formed four strategic plan task forces, each under the chairmanship of a member of the board, to assist in further determining the Authority's way forward. The task forces are reviewing all aspects of regulation in relation to banking, insurance, investments and securities, and fiduciary services.

As part of the Authority's obligation to review its regulatory laws on a periodic basis, a Mutual Funds Working Group comprising senior Authority personnel and industry representatives was established in November. 

The group is currently re-examining the regulatory framework in respect of mutual funds in the Cayman Islands with a view to recommending legislative changes to the Mutual Funds Law (2003 Revision). Findings of the review will be made available to industry for consultation by May 2004. 

In order to improve public access to information on its activities, the Authority's website, www.cimoney.com.ky will undergo major reconstruction during the first quarter of the year. An in-house website committee with representatives from all divisions has been formed and tasked to review, update and supplement the content of the website. 
During this exercise, its design will also be reviewed to facilitate enhanced navigation of the site. In the interim, users are encouraged to continue to access the website, which provides useful information including the Authority's mission statement, listing of rules, statements of guidance, and publications. 

The quarterly newsletter, formerly The Schooner, now The Navigator, which was issued in January and is available on the website, will continue to update readers on the achievements and activities of the Authority and highlight events affecting Cayman's regulatory landscape. 
As for the coming year, Ms Scotland said: "This year presents new challenges for the Authority but I am confident that the continued commitment from my fellow board colleagues, the management team and staff, in addition to our ongoing partnership with the Government and the private sector, will result in the Authority fulfilling its mission."

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