GEORGE TOWN, Cayman Islands, CMC — The Cayman Islands Monetary Authority (CIMA) says it has formalised procedures for exchanging supervisory information on United States and Cayman Islands banks and banking institutions that have operations in each others’ jurisdictions.

CIMA said that the four main federal banking regulators in the United States that are parties to the “Statement of Cooperation” are: the Board of Governors of the Federal Reserve System (the Board), the Office of the Comptroller of the Currency (OCC), the Federal Deposit Insurance Corporation (FDIC) and the Office of Thrift Supervision (OTS).

CIMA said the agreement came into effect after several months of negotiations, stating that it “should make it easier for both the Cayman and US regulators to access pertinent information and supervisory assistance from each other.”

“This is to enable them to more effectively supervise entities for which they have overall responsibility, when those entities also have operations in the other jurisdiction,” the statement said.

It said among aspects that the accord covers is the sharing of information when a Cayman Islands or US regulated bank or banking institution is seeking approval in the other jurisdiction to set up a branch, subsidiary or affiliate in that jurisdiction.

“This way, the home regulator will be aware when its entities are seeking to set up establishments in the other jurisdiction, and the host regulator will know when it is considering an application for authorisation, if the institution is in good regulatory standing at home,” CIMA said.

“Additionally, the agreement establishes protocols for information exchange and general cooperation to facilitate ongoing consolidated supervision of these cross-border institutions as permitted by the laws of both jurisdictions,” it added.” It also sets the framework for handling confidential information on both sides.”

CIMA said since its inception, it has put in place about 17 other cooperation and information exchange agreements with foreign regulators “to facilitate the exercise of one of its statutory functions – that of providing assistance to overseas regulatory authorities.”

Cindy Scotland, CIMA’s managing director, said entering into this agreement with the US banking regulators is also consistent with one of the recommendations of the International Monetary Fund in its 2009 report on the Assessment of the Financial Sector Supervision and Regulation in the Cayman Islands.

“The report recommended that CIMA enter into agreements with home supervisors of international financial institutions it regulates in order to manage the risks involved in the cross border operations of such institutions,” she said.

“This is something that we accepted and moved speedily to implement,” she added.

Cayman Islands Premier and Minister of Finance McKeeva Bush lauded the memorandum of understanding, stating that it is important from a regulatory and a business perspective.

“This agreement will certainly enhance CIMA’s effectiveness and that of the other regulators in executing their supervisory responsibilities with regard to cross-border banking entities,” he said.

“For international banks and banking institutions with entities in Cayman, as well as their Cayman service providers, this is a reputational boost that should enable them to attract more business,” he added.

“It provides further evidence of the Cayman Islands’ commitment to sound regulation and international cooperation and shows our increasing stature as an international financial centre,” Bush continued.

CIMA’s other overseas information exchange and cooperation accords include agreements with the United Kingdom, Canada, Malta, Jersey, Isle of Man, Brazil, Argentina, Jamaica and Panama, and member jurisdictions of the International Organisation of Securities Commissions (IOSCO).

Other US regulators with which agreements exist are the Securities and Exchange Commission (SEC), State of Florida Office of Insurance Regulation, and the Office of Insurance Commissioner of the State of Washington.