Cayman Islands Regulatory Round Up - Winter 2025/26
This Round Up provides a concise yet thorough summary of regulatory developments relevant to financial service providers (FSPs) and other stakeholders in the Cayman Islands. It highlights key legislative changes, publications and updates by the Cayman Islands Monetary Authority (CIMA) and Department for International Tax Cooperation (DITC), updates on financial sanctions, and anticipates key upcoming changes through “horizon scanning”. Links to relevant underlying CIMA and/or DITC publications, as well as related Appleby published briefings and e-alerts are available throughout this summary. All information provided is “as of” February 2026.
Recent and upcoming Filings and Deadlines
15 January 2026: Deadline for the payment of annual CIMA fees (which include the fund annual return filing fee for 2026). Also the deadline for the renewal of annual CIMA director registrations for mutual funds.
31 January 2026: Deadline to file economic substance notification with the DITC. Also the deadline for annual returns and annual fees payable to the Registrar.
15 March 2026: Date after which failure to pay incremental CIMA fee increases for 2026 will attract penalties. See CIMA Notice of 13 February 2026.
31 March 2026: Date by which new Prudential Information Survey for Registered Persons under the Securities Investment Business Act (Revised) (SIBA) should be filed with CIMA. See CIMA Notice of 31 December 2025.
KEY legislative DEVELOPMENTS
2026 Consolidations of Note:
The Cayman Islands Government has published a range of 2026 revised and/or consolidated Acts and Regulations, including amongst others, the Beneficial Ownership Transparency Act, Beneficial Ownership Transparency Regulations, Companies Act, and International Tax Co-operation (Economic Substance) Act.
Virtual Asset Service Providers Regime
The Virtual Asset (Service Providers) (Amendment) Bill, 2026 (not yet in force) will, when brought into effect, amend the Virtual Asset (Service Providers) Act (2024 Revision) (VASP Act) to change the definition of “issuance of virtual assets” or “virtual asset issuance” to mean the sale of newly created virtual assets to the public in or from within the Cayman Islands in exchange for fiat currency, other virtual assets or other consideration. Excluded from the new definition will be the sale of virtual service tokens and the issuance of:
- a digital equity token by a tokenized mutual fund in accordance with the Mutual Funds Act (2025 Revision); or
- (ii) a digital investment token by a tokenized private fund in accordance with the Private Funds Act (2025 Revision).
The amendments clarify that the issuance, creation, sale, transfer or other disposition of tokenized equity or investment interests by regulated mutual funds and regulated private funds will not be considered to be an issuance of virtual assets under the VASP Act. This Bill was published together with the Mutual Funds (Amendment) Bill, 2026 which defines a “digital equity token” as a digital representation of an investor’s entire equity interest in a mutual fund, and the Private Funds (Amendment) Bill, 2026 which introduces the concept of a “digital investment token” for private funds.
The above mutual fund and private fund amendment Bills attach additional obligations to operators of tokenized funds, including obligations to: (i) confirm annually to CIMA that all records relating to the issuance, creation, sale, transfer and ownership of digital tokens have been properly maintained; (ii) require any transfer of tokenized interests to be approved in accordance with the offering materials; and (iii) require the disclosure of risks specific to digital tokens and how those risk are mitigated for investors.
CIMA – Desk Based Review of Virtual Asset Service Providers (VASPs)
In November 2025, CIMA reported its findings from its thematic desk-based review conducted from September 2024 to February 2025 in respect of 11 regulated VASPs (available here). CIMA identified several good practices as well as areas for improvement. Key findings in this respect highlighted significant gaps in corporate governance, cybersecurity and asset custody with CIMA urging regulated entities to strengthen internal controls.
VASP Rules and Statements of Guidance
In February 2026, CIMA issued a Rule and Statement of Guidance on Market Conduct for VASPs (MC-RSOG) applicable to all VASPs authorized under the VASP Act, and issued updated versions of the existing Rule – Obligations for the provision of virtual asset services – Virtual Asset Custodians and Virtual Asset Trading Platforms and Statement of Guidance for the provision of virtual asset services – Virtual Asset Custodians and Virtual Asset Trading Platforms (Custody and VATP R&SOG) which were each originally published in December 2024.
The MC-RSOG reiterates minimum standards governing how VASPs interact with clients and the market and that VASPs are expected to act with honesty, integrity, due skill and due care throughout the client lifecycle, including in client communications, transaction execution and ongoing servicing. MC-RSOG requirements include, amongst other things, robust conflicts of interest management, complaints handling procedures, protection of client assets, confidentiality of client information, fair marketing practices and transparent disclosures. In addition, it is expected that insurance coverage is maintained, or where insurance is unavailable, alternative risk mitigation measures are put in place.
The updates to the Custody and VATP R&SOG largely involved the removal of various provisions that are covered in detail in the MC-RSOG.
Companies (Amendment) Act, 2024
The Companies (Amendment) Act, 2024 came into effect on 1 January 2026 and introduced a number of welcome enhancements to the jurisdiction’s existing corporate law, including:
- Introduction of a streamlined, cost-effective process for effecting capital reductions by way of special resolutions and directors’ solvency statement; removing the requirement for a formal court application.
- Expanded continuation provisions which allow for a company incorporated overseas to transfer the its registration to the Cayman Islands as an exempted company.
- Re-registration and conversion provisions allowing for conversion between limited liability companies, foundation companies and exempted companies. Exempted companies may also re-register as ordinary resident companies.
For further details, see our November briefing here.
Tax Information Authority (International Tax Compliance) (Common Reporting Standard) (Amendment) Regulations, 2025
Key changes to the Common Reporting Standard (CRS) as implemented in the Cayman Islands took effect from 1 January 2026, with certain provisions set to take effect in 2027. The relevant amendments to the CRS are intended to align this regime with the new CARF framework (see below) and to avoid duplicative reporting. Key amendments include:
- The definition of “financial assets” has been expanded to include crypto-assets and to bring certain electronic money products and central bank digital currencies into scope.
- Cayman Financial Institutions (FI) will be required to appoint a person in the Cayman Islands as their principal point of contact (PPoC). Notification of the Cayman PPoC and the date on which an FI became an FI will need to be provided to the DITC by 1 January 2027.
- For FIs that commenced activities during 2025, the DITC registration deadline will continue to be 30 April 2026. However new FIs that commenced activities from 1 January 2026 will be required to register on the DITC portal by 31 January 2027.
- The 2025 reporting year annual CRS return filing deadline and compliance form due date will stay the same (31 July 2026 and 15 September 2026 respectively). However, for the 2026 reporting year, the CRS return filing deadline and compliance form due date will both be 30 June 2027.
Crypto-Asset Reporting Framework
The Tax Information Authority (International Tax Compliance) (Crypto-Asset Reporting Framework) Regulations, 2025 implemented a new Crypto-Asset Reporting Framework (CARF) with effect from 1 January 2026, a regime similar in operation to the existing CRS regime. CARF applies to entities that are incorporated, registered, established or regulated in the Cayman Islands, or which have a place of effective management in the Cayman Islands, that, as a business provide a service of effectuating relevant exchange transactions (i.e. as between relevant crypto-assets or as between relevant crypto-assets and fiat currencies) for or on behalf of customers, including by acting as a counterparty or intermediary, or by making available a trading platform.
Existing entities that are within scope of CARF will be required to register with the DITC on or before 30 April 2026. Entities that fall within scope on or after 1 January 2026 will need to register by 31 January 2027.
In-scope entities will need to establish and maintain written policies and procedures to comply with CARF, conduct due diligence and obtain self-certifications from customers to determine tax residence and report certain prescribed information to the DITC annually.
Annual reporting is due on or before 30 June; accordingly, the first reports under the CARF regime will be due by 30 June 2027 in respect of the reporting period 1 January 2026 to 31 December 2026.
Beneficial Ownership Regime
Now consolidated in the 2026 Revision of the Beneficial Ownership Transparency Act, recent amendments to the Beneficial Ownership regime were introduced through the Beneficial Ownership Transparency (Amendment) Act, 2025, Beneficial Ownership Transparency (Amendment) (No. 2) Act, 2025, Beneficial Ownership Transparency (Amendment) Regulations, 2025 and Beneficial Ownership Transparency (Amendment) Regulations, 2026.
The most recent amendments include:
- A requirement for companies that are subsidiaries of listed entities to provide the name of their parent company when reporting in order to assist the competent authority to understand the relevant corporate structure;
- Expanded provisions for sharing beneficial ownership information with foreign authorities that have similar responsibilities for combatting money laundering and terrorist financing;
- Clarification that administrative fines are maximum fines rather than a flat penalties which allows for the imposition of lower fines for inadvertent breaches or technical difficulties; and
- Clarification of the procedures for issuing restrictions notices when entities fail to comply with information requests; providing a clear 30 day timeline for responses.
Government Fee Increases
A range of fee increases came into effect on 1 January 2026 affecting CIMA regulated entities. CIMA’s updated fee schedule dated January 2026 is available here.
DITC Updates
December 2025: The DITC issued an Industry Advisory in respect of Country-by-Country Reporting (CbCR) functionality which is now available on the DITC Portal. The CbCR filing deadline is generally twelve months after the last day of the reporting fiscal year. However, for in-scope multinational enterprise (MNE) Groups with a filing deadline between 31 July 2025 and 31 December 2025, an extension was granted to submit the 2024 fiscal year filings until 27 February 2026.
CIMA publications
A series of Notices and other publications were issued by CIMA between July 2025 and the date of this Round Up:
July 2025
- Notice regarding CIMA’s revised Regulatory handbook and its Enforcement Manual which contains the framework governing CIMA’s enforcement regime in instances of non-compliance with Regulatory Acts in force in the Cayman Islands.
- Notice advising of CIMA’s updated VASP application form APP 101-84-05.
- Notice advising that the ability to provide operator letters in lieu of notarized affidavits for fund registration and licensing applications which was originally introduced during the COVID-19 pandemic will no longer be permitted from 15 October 2025.
September 2025
- Notice announcing a short term amnesty for non-compliant registered directors to pay outstanding fees and penalties at a discounted rate. The amnesty ran from 16 September to 15 October, 2025.
- CIMA Issued a Rule and an associated Regulatory Procedure in respect of the cancellation of licences, registrations or waivers for VASPs.
- CIMA published a Supervisory Circular outlining its findings relating to AML/CFT on-site and off-site inspections of virtual asset service providers.
October 2025 – The REEFS application form for Private Fund registrations APP-101-77 was replaced with a new form APP-101-77-05.
November 2025
- Notice that updated forms are required for mutual fund and private fund de-registrations on REEFS from 8 November 2025. Private and mutual fund de-registrations should use form TMF-147-22 v 2 and the termination of a segregated portfolio, series trust or sub-fund should use TRS-142-99 v 2. Applications submitted by email will no longer be accepted.
- Notice advising that all regulated VASPS are required to complete and submit financial returns form VFR-051-84 by 31 December 2025 for the reporting period ending 30 September 2025.
December 2025
- Notice advising VASPs that from 1 December 2025, the VASP Financial Returns Form is available within REEFS – VFR-051-84.
- Notice advising all entities registered as SIBA Registered Persons of the requirement to submit a Prudential Information Survey (ADR-046-75-02) for the 2025 calendar year via the REEFS portal. The Survey is available for completion from 1 January 2026 to 31 March 2026. The Survey is required to be completed in addition to the annual declaration (ADR-046-75). For further information and Guidance see here.
- Notice reminding industry stakeholders of various fee increases taking effect on 1 January 2026. For entities affected by the increases, no penalties will be assessed until after 15 February 2026. At a minimum, the 2025 fee amounts should be submitted by the statutory deadline of 15 January 2026. By Further Notice in February 2026, CIMA advised that no penalties would be imposed upon outstanding incremental increases until after 15 February 2026. Which was by Notice dated 13 February 2026 extended again until 15 March 2026.
January 2026
CIMA issued its Thematic Review on Outsourcing (available here). In 2025 CIMA reviewed sixteen cross-sector selected entities and evaluated the effectiveness of governance structures, risk assessment practices and oversight controls relating to outsourcing arrangements. The main areas of deficiency identified included inadequate outsourcing agreements; failures to adequately review policies annually or maintain centralized logs of material outsourcing and incomplete risk assessments.
Financial sanctions
November 2025: The Cayman Financial Reporting Authority (FRA) announced a requirement for persons holding or controlling funds or economic resources of designated persons under UK sanctions as at 30 September 2025, to provide a report by 30 November 2025, with annual reporting thereafter.
January 2026: By Public Notice dated 28 January 2026, with effect from 9:00am GMT, the OFSI Consolidated List of Asset Freeze Targets and its search tool were closed. Going forward, the UK Sanctions List is the only source for all UK sanctions designations. All ongoing monitoring and searches should be conducted using the UK Sanctions List.
2026 Horizon SCANNING
Looking ahead, and as referred to where appropriate in this Round Up, the Cayman Islands is expected to continue to enhance its existing regulatory frameworks for securities investment businesses, VASPs and in respect of AML/ FT/ CPF and CRS implementation through the end 2026 – with industry consultation on proposed amendments to SIBA and proposed new CIMA Rules on AML/ CFT/ CPF and Financial Sanctions compliance pending. Anticipated developments in these spaces reflect the jurisdiction’s ongoing commitment to maintaining internationally respected standards and ensuring that the Cayman Islands remains a competitive, reputable and globally recognised international financial centre.
Clients are encouraged to familiarize themselves with the above updates to deadlines and reporting requirements in the Cayman Islands so as to ensure their continued compliance.
PUBLISHED briefings and e-alerts
Appleby has published the following Briefings and E-alerts on its website.
These resources were also sent directly to client subscribers:
June: Minority Shareholder Protections in the Cayman Islands – What are Your Options (11 June 2025)
June: Blockchain Guide – Cayman Islands (17 June 2025)
July: Crypto Funds in the Cayman Islands (1 July 2025)
July: Navigating Cayman Islands Investment Funds: 10 Key FAQs for Emerging Managers (24 July 2025)
August: CRS Compliance and Enforcement in the Cayman Islands – What are the Enforcement Trends? (5 August 2025)
August 2025: Cayman Ultimate General Partners in Subscription Facilities: Do They Ultimately Matter? (12 August 2025)
August 2025: Hong Kong and Australian Courts Recognise Principles of Segregation in Cayman SPCs (21 August 2025)
September 2025: A Guide to Transferring Shares in a Local Company (1 September 2025)
September 2025: CIMA Launches One-Time Amnesty Scheme for Non-Compliant Directors (8 September 2025)
September 2025: Typical Collateral Package in Cayman Fund Financing (25 September 2025)
September 2025: Cayman Islands Foundation Companies Guide 2025 – Part 1 (26 September 2025)
October 2025: Redemption of Cayman Shares in Chinese Red Chip Corporate Groups – Latest Developments and Ideas for Investors (21 October 2025)
November 2025: Guide to Banking and Finance in the Cayman Islands 2025 (11 November 2025)
November 2025: Cayman Companies Act: Key Amendments Coming into Force (12 November 2025)
November 2025: Guide to Private Credit 2026 in the Cayman Islands (24 November 2025)
November 2025: The Guide to Alternative Funds in the Cayman Islands (26 November 2025)
December 2025: Cayman Islands: Updated CRS Obligations and CARF Implementation for Cayman Entities – effective 1 January 2026 (8 December 2025)
December 2025: Collateral Beauty: Taking Security In Fund Finance (17 December 2025)
January 2026: Appleby Cayman Expands Corporate Team with Appointment of Martin Byers as Partner & Head of Regulatory (22 January 2026)
January 2026: CIMA Launches Prudential Information Survey for SIBA Registered Persons (27 January 2026)
February 2026: Cayman Islands Sanctions Update: Switching To The UK Sanctions List | Appleby (2 February 2026)
February 2026: The New Crypto-Asset Reporting Framework – Relevance for Cayman Investment Funds (4 February 2026)
February 2026: Preparing for and Managing a CIMA Onsite Inspection (16 February 2026)
How we can help
Keeping up to date with new and proposed legislation and regulations is an ongoing challenge for businesses. Our regulatory team monitors and analyses proposed and upcoming legislative and regulatory developments, to determine the practical implications for our clients.
Our regulatory team has seen increased demand from clients for advice on and assistance in complying with both CIMA and DITC requirements. We continue to:
- monitor Cayman Islands legal and regulatory developments;
- produce client focused briefings and e-alerts tracking new developments;
- contribute to various industry consultations covering legal and regulatory developments affecting our clients’ businesses; and
- provide training to clients to support their existing compliance frameworks.
Please do not hesitate to contact us if you require guidance on any of the above developments or assistance with your regulatory obligations.
This information is provided for general information purposes only and does not cover every aspect of the subject matter discussed, and is not intended to constitute legal advice. For specific regulatory advice, please contact any member of our Appleby regulatory team.
