Cayman Islands forex license (CIMA SIBL)

SIBA licensee vs registered person: the choice that matters

Most confusion about “Cayman SIBL” comes from mixing up two different statuses:

• Licensee (SIBL). Fully licensed by CIMA under section 6 of SIBA, in one or more categories: broker-dealer, market maker, securities arranger, securities manager or securities advisor. A licence can be full or restricted (limited to a small number of named clients).
• Registered person. Exempt from licensing but registered with CIMA under Schedule 4. Only available for intra-group business, business exclusively with sophisticated or high-net-worth persons, or firms regulated by a recognised overseas regulator.

The former “excluded person” category no longer exists: after the 2019 amendment those firms had to register, obtain a licence or stop by 15 January 2020. For a broker serving retail clients, only the full broker-dealer licence works.

What CIMA looks for

Under section 6 of SIBA, CIMA must be satisfied that the applicant:

• can comply with SIBA and the Anti-Money Laundering Regulations;
• has adequate personnel, skills, facilities, books and records;
• has fit and proper senior officers and managers, judged on honesty, integrity and reputation, competence and financial soundness;
• and that granting the licence is in the public interest.

The applicant can be a Cayman company, a partnership, an LLC or LLP, or a foreign company registered in Cayman, with at least two directors or managers.

Capital, insurance and costs, in plain terms

Broker-dealers must maintain minimum financial resources set by the Financial Requirements and Standards Regulations, at a higher level than advisors or arrangers. CIMA also expects professional indemnity, directors and officers and business interruption insurance, plus annual audits and monthly returns. Together these make Cayman one of the more expensive offshore licences to hold. We do not quote amounts because they change and depend on your category; we set them out in a proposal.

Recognition and tax

CIMA joined IOSCO as an ordinary member in 2009 and signed the IOSCO Multilateral MoU, which gives a Cayman licence more weight with banks, prime brokers and institutional counterparties than most offshore options. The Cayman Islands levy no direct taxes, but economic substance and international reporting rules may apply to your entity, so plan management and staffing accordingly.