What is CIMA?

The Cayman Islands Monetary Authority, CIMA, is the main regulator of financial services in the Cayman Islands. The objective of the agency is to regulate financial services and maintain monetary stability. It is responsible for its currency board’s supervision, which supports fixed exchange rates with other currencies. The regulator formed in 1997 to merge the previous Financial Services Supervision Department of the Cayman Islands Government and the Cayman Islands Currency Board under one roof.

The CIMA has four main functions.

Regulatory function

CIMA regulates and supervises financial services, including the Cayman Islands Forex brokers. It oversees compliance with regulations related to money laundering. It publishes a regulatory manual containing policies and procedures, rules, statements of principles, and guidelines for brokers regulated by CIMA and other financial entities.

Monetary function

The CIMA issues and redeems the Cayman Islands currency and is responsible for managing foreign exchange reserves.

Advisory function

The CIMA advises the government on monetary, cooperative, and regulatory matters.

Cooperation

CIMA assists foreign regulators to promote consolidated supervision of financial markets.

The Government of the Cayman Islands owns CIMA under the Monetary Authority Act (2013 revision). The governor appoints the entire Board of Directors of the Authority and has the power to direct the Authority, after consulting the Board. The governor may also request an independent review of the actions and performance of the Authority.

Cayman Islands traders have access to data from CIMA regulated Forex brokers

The general public has access to different types of records held by public authorities in the Cayman Islands. CIMA is committed to openness, transparency, and accountability. As part of this transparency, a trader can review a list of Securities Investment Company Licenses if they consider working with Forex brokers located in the Cayman Islands. Moreover, every CIMA regulated broker must comply with the series of obligations. Accounts have to be audited annually. A certificate of conformity must be submitted together with the annual accounts. Besides, any change in the company data must be notified. Licensed brokers or dealers provide their account statements monthly. An auditor should give an opinion on the licensee’s internal controls.

What powers does CIMA have?

CIMA has the power to suspend or revoke regulated firms and agents. The regulator can appoint or replace an officer, shareholder, or controller to firms under its auspices. 

How does CIMA protect investors?

In fact, CIMA works to reduce the possibility of the criminal use of financial services businesses. The regulator ensures the international competitiveness of Cayman Islands financial services, encourages innovation in the sector, and strives to be transparent and fair. Furthermore, the Cayman Islands-regulated funds reported its total gross assets at $7.35 trillion for the financial year 2018.

The CIMA and its international relations

The CIMA operates with respect to international standards. It is also represented in different organizations, including the International Organization of Securities Commissions (IOSCO), Association of Banking Supervisors of the Americas (ASBA), Cross Border Banking Offshore Group, Caribbean Financial Action Task Force (CFATF), and Working Group on Cross-Border Banking.

CIMA also participates in the Information Framework Initiative of the International Monetary Fund. It requires the regulator to provide statistical information to the IMF.

The role of the IOSCO

The IOSCO, or the International Organization of Securities Commissions, brings together several bodies responsible for the global regulation of the securities and global markets. It incorporates more than 100 financial regulators from different countries, accounting for more than 95% of the market. Additionally, the organization meets several times a year in various locations to promote high standards of regulation. It also provides a forum that allows members to cooperate. Besides, it supports the involvement of other international organizations.

The CIMA-regulated broker will provide you with protection

Forex trading is impossible without the help of a Forex broker. In fact, there are several illegal providers, and it’s important to protect yourself and your investments. The best way to do this is by picking a provider that meets certain standards, the one that is licensed and regulated.

When choosing a Forex broker in the Cayman Islands, there are some things to consider. However, regulation should be at the top of your priorities. With an unregulated broker, regulatory bodies are unable to assist if you need to make a complaint. Besides, there is a risk of losing some or all of your investment if the unregulated broker found itself in financial trouble.