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The Cayman Islands Monetary Authority (“CIMA”) has gazetted a new Rule on Effective Compliance Programme for the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing for Financial Services Providers (the “AML Rule”), together with a companion Rule on Compliance with Financial Sanctions and Targeted Financial Sanctions (the “Sanctions Rule”, and together with the AML Rule, the “Rules”). The Rules will come into force on 18 September 2026.
The AML Rule will have the force of law when it comes into force and it supplements, and is expressed to be subordinate to, the Anti-Money Laundering Regulations (the “AMLRs”), which prevail in the event of any inconsistency. In essence, the AML Rule consolidates and distils obligations that have previously appeared in CIMA’s Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands (the “Guidance Notes”) into a shorter, directly enforceable rule.
To whom do these new Rules apply?
The AML Rule applies to all categories of CIMA-registered or licensed business (“Financial Service Providers” or “FSPs”), including registered mutual funds and private funds, Registered Persons under the Securities Investment Business Act, banks and trust companies, insurance and reinsurance licensees, securities investment business licensees, virtual asset service providers, money services businesses, and company managers and corporate services providers, together with branches, subsidiaries and affiliates forming part of a CIMA-regulated financial group.
The AML Rule does not apply to persons who are not registered with or licensed by CIMA.
| Area Nature of Change | Nature of Change |
| Enforceability | Existing Guidance Notes expectations become directly enforceable Rule provisions; breach may result in a fine or regulatory action under CIMA’s Enforcement Manual, rather than being treated only as an interpretive factor. |
| Audit rotation | Internal audit is capped at two consecutive cycles; the following cycle must be conducted externally. This was not previously a fixed requirement. |
| Audit independence evidencing | FSPs must be able to produce, on request, documentation evidencing the independence of the person(s) who performed the audit. |
| Audit report filing | Audit reports must be filed with CIMA as soon as practically possible. This is a new filing obligation for FSPs not currently required to submit them. |
| Outsourcing notification | Express requirement to notify CIMA in writing of outsourcing arrangements covering material Compliance Programme functions. |
| Documented training plan | A standalone, forward-looking training plan is required as a distinct deliverable, separate from evidence that training was delivered. |
| Risk-assessment trigger events | Express list of events requiring an immediate risk-assessment refresh, including geopolitical and economic developments |
| Beneficial ownership currency | Standalone obligation to keep beneficial ownership information accurate and up to date under periodic review, distinct from the retention obligation. |
The Sanctions Rule
CIMA has concurrently gazetted the Sanctions Rule, which applies to the same group of CIMA regulated FSPs and takes effect on the same date, 18 September 2026. The AML Rule expressly cross-refers to the Sanctions Rule in respect of detailed sanctions-screening obligations. As sanctions and targeted financial sanctions compliance is embedded throughout the AML Rule’s CDD, policy and training requirements, FSPs are advised to address compliance with both Rules as a single, coordinated exercise.
Enforcement
Any breach of the AML Rule is dealt with in accordance with CIMA’s Enforcement Manual, in addition to any other powers available to CIMA under the Regulatory Acts, the AMLRs and the Monetary Authority Act.
Key Dates
| Date | Milestone |
| 20 July 2026 | AML Rule and Sanctions Rule gazetted. |
| 18 September 2026 | AML Rule and Sanctions Rule come into force. |
| From 18 September 2026 | Breaches enforceable under CIMA’s Enforcement Manual and its powers under the Regulatory Acts, the AMLRs and the Monetary Authority Act. |
Recommended Actions
FSPs, and their Governing Bodies, are advised to take the following steps in advance of the 18 September 2026 effective date:
- Review existing AML/CFT/CPF policies, procedures and Compliance Programme documentation against the minimum requirements of the AML Rule, and remediate any identified gaps.
- Confirm that arrangements evidencing the AMLCO’s independence are documented, particularly where full functional separation from business operations is not practicable.
- Review recent audit history to determine whether the two most recent audit cycles were conducted internally and, if so, arrange for the next cycle to be conducted by an external service provider. Establish a mechanism for timely filing of the Compliance Programme audit report with CIMA following completion.
- Review and, where necessary, update the FSP’s (or, in the case of investment funds,the fund’s) documented risk assessment, ensuring it addresses the trigger events specified in the AML Rule.
- Prepare or update a documented, forward-looking training plan addressing recipients, topics, delivery methods and frequency, as a deliverable distinct from training records.
- Confirm that all outsourcing arrangements relating to material functions of the Compliance Programme have been, or will be, notified to CIMA in writing.
- Review beneficial ownership data maintenance processes to confirm a periodic review mechanism, rather than mere retention, is in place.
- Diarise the 18 September 2026 effective date and allow sufficient time for Governing Body approval of any updated policies and procedures prior to that date.
How We Can Help
We can assist with a gap analysis of your existing Compliance Programme against the AML Rule and Sanctions Rule, drafting or updating AML policies and the required training plan, arranging or reviewing independent audits, and preparing board papers for Governing Body approval.
Please get in touch if you would like to discuss any of the above.
