The Cayman Islands Monetary Authority (CIMA) has strengthened its commitment to cooperating and sharing information with international regulatory counterparts by entering into a Memorandum of Understanding (MOU) with the Comissão de Valores Mobiliários (CVM), the Securities and Exchange Commission of Brazil. This is the second MOU which CIMA has entered into with a Brazilian entity, having signed a first in March 2006 with Banco Central do Brazil (Brazil Central Bank).
CIMA and CVM had been deliberating a MOU since late 2007 and in December 2008 a CIMA delegation, joined by representatives of the Cayman Islands Financial Services Association and Deloitte, travelled to Brazil as part of a relationship-building visit. There, they met with CVM officials for further discussions which ultimately led to agreement on the MOU at the end of February 2009.
The MOU provides that, subject to certain exceptions, the two authorities will cooperate with each other in providing assistance to secure compliance with their home “Laws and Regulations”. “Laws and Regulations” is defined to include only those laws and regulations regulated by the two authorities being securities and derivatives legislation, including insider dealing legislation, the regulation of market intermediaries including investment advisors, funds, brokers, dealers and transfer agents and the regulation of markets, exchanges and clearing and settlement agencies. Assistance may include providing or obtaining information and documents to establish audit trails, the identity of the beneficial owner and controller of bank accounts and the identity of persons owning or controlling companies or other legal persons established within a jurisdiction. The assisting regulator may also seek responses to questions and/or a statement from any person involved in the activities which are the subject matter of the request for assistance or who is in possession of information that may assist in the execution of the request. Requests for assistance should include, inter alia, details of the Laws and Regulations that may have been violated in relation to the assistance request, a description of the facts and the purpose of the proposed assistance and any indication of special precautions recommended to collect information. Joint investigations are contemplated where a joint investigation would assist in the effective investigation of the alleged violations.
Information obtained under the MOU may be used for conducting a civil or administrative enforcement proceeding, assisting in a relevant self-regulatory organisation's surveillance or enforcement activities, assisting in a criminal prosecution or conducting any investigation for any general charge alleging a breach of Laws and Regulations.