Under new anti-money laundering legislation, the list of activities classed as relevant financial businesses has been expanded. Unregulated investment funds and some insurance entities have now been given a grace period until May 31 2018 to establish anti-money laundering compliance programmes. This is a welcome move, particularly for unregulated investment funds which were not bound by the preceding regulations and therefore may not have policies and procedures in place.
The 2017 deadlines for notification and reporting obligations under the Common Reporting Standard regulations will be extended by two months. Cayman reporting financial institutions will not have notification or reporting obligations under the UK Crown Dependency and Overseas Territories International Tax Compliance Regulations from 2017 onwards; however, obligations under the US Foreign Account Tax Compliance Act remain unchanged.
In 2013 Parliament passed the Resolution of Credit and Other Institutions Law to facilitate the restoration of the viability of the Cyprus financial sector. However, this law was enacted before the implementation of the EU Banking Recovery and Resolution Directive. Parliament has now enacted the new Law for the Resolution of Credit Institutions and Investment Companies in order to align Cyprus national law fully with EU provisions.
The most pressing Brexit concern for UK-based credit and financial institutions is the terms on which they will continue to have access to the EU single market and related passporting rights if and when the United Kingdom leaves the European Union. Cyprus can offer a solution to international firms and institutions seeking certainty over EU single market access.
The Cayman Islands Court of Appeal recently provided some clarity on the ranking of priority in the liquidation of amounts owing to shareholders and former shareholders of a company operating as an open-ended investment fund. The decision has confirmed that Section 37(7)(a) of the Cayman Islands Companies Law applies where a shareholder has merely accrued the right to redeem his or her shares, but has not yet completed the redemption process prescribed by the company's articles.
Shareholders in a company that is the subject of a takeover and merger have certain intrinsic rights available to them in the event that they dissent to the merger, most notably a right to have their shares purchased at a 'fair value'. The Cayman courts will approach the issue of fair value on the individual facts; the starting point is a valuation approach on the basis of no discount or premium attributable to the merger itself.
The spotlight of the international community is shining more brightly than ever on international financial centres and those that use them, in an effort to reduce aggressive tax avoidance and tax evasion. To assist global efforts to tackle tax evasion and corruption and to increase transparency, the government has amended the Companies Law and proposed a fundamental overhaul of its confidentiality laws.
Corporate law in the British Virgin Islands provides for a number of mechanisms that can be used for the purpose of acquiring control of a company, but in the last 24 months there has been a noticeable increase in the occurrence of the use of top-up options, especially in relation to publicly listed BVI companies and tender offers in M&A transactions.
An important issue for a company being accepted for listing purposes on international stock exchanges is shareholder protection. BVI corporate statutes now place more emphasis on protection of the rights of minority shareholders and, as a result, BVI companies are now accepted on the Hong Kong Stock Exchange.