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Building Societies Act (2020 Revision)

Summary

A Law providing for the incorporation, regulation, and management of building societies in the Cayman Islands, including fitness and propriety standards for officers and regulatory oversight by CIMA.

Sources

[[Building_Societies_Act_(2020_Revision).pdf]]

Last Updated

2026-04-27

Overview

The Act governs the establishment and operation of building-societies, which are incorporated bodies formed for the purpose of raising funds through member shares to make advances to members upon security of freehold property or uncharged shares (source: Building_Societies_Act_(2020_Revision).pdf, Sections 3, 16, 17).

Incorporation and Governance

  • Incorporation: Any number of persons may establish a society by having its rules certified by the Attorney General and obtaining a certificate from the Registrar (source: Building_Societies_Act_(2020_Revision).pdf, Section 3).
  • Rules: Every society must have rules covering its name, purposes, investment policies, officer appointment/removal, and dispute resolution (source: Building_Societies_Act_(2020_Revision).pdf, Section 4).
  • Fit and Proper Standards: Proposed directors and senior officers must be approved by cima as "fit and proper" persons, considering their honesty, integrity, competence, and financial soundness (source: Building_Societies_Act_(2020_Revision).pdf, Sections 3(1A), 13A).
  • Capital: Capital is raised by shares not exceeding $500 each in ultimate value (source: Building_Societies_Act_(2020_Revision).pdf, Section 53).

Financial Regulation

  • Interest Caps: Interest on loans to members is capped at 12.5% per annum (source: Building_Societies_Act_(2020_Revision).pdf, Section 5).
  • Fine Caps: Fines for arrears are capped at 2% per month and a total of 20% of the arrears (source: Building_Societies_Act_(2020_Revision).pdf, Section 5).
  • Borrowing Limits: Total deposits or loans received by a society cannot exceed 75% of the amount secured to the society by mortgages from its members (source: Building_Societies_Act_(2020_Revision).pdf, Section 19).
  • Advances: Societies may make advances on freehold mortgages or on the security of uncharged shares (limited to 80% of the amount paid in) (source: Building_Societies_Act_(2020_Revision).pdf, Sections 16, 17).

Audit and Supervision

  • Annual Audit: Societies must prepare annual audited statements of funds, a copy of which must be sent to cima (source: Building_Societies_Act_(2020_Revision).pdf, Section 21).
  • Auditor Obligations: Auditors must notify CIMA immediately if they suspect the society is insolvent, carrying on business in a prejudicial/fraudulent manner, or breaching the monetary-authority-act-2020 or anti-money-laundering-regulations-2025 (source: Building_Societies_Act_(2020_Revision).pdf, Section 22A).
  • CIMA Powers: CIMA may examine a society's affairs, require the substitution of directors, appoint advisers or controllers, or apply to the Court for winding up (source: Building_Societies_Act_(2020_Revision).pdf, Sections 33, 34).

Fees

  • Incorporation Fee: $100
  • Annual Fee: $100
  • Annual Regulatory Fee: $7,000 (payable by January 15th each year) (source: Building_Societies_Act_(2020_Revision).pdf, Section 8)

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