The Cayman Islands Director Registration and Licensing Law (2014) (the Law) was recently gazetted along with the related regulations which set out in more detail the registration requirements and fees. The Law came into effect on 4 June 2014, and directors of Cayman “covered entities” will have three (3) months from that date to register or licence, unless they are corporate entities in which case they will have six (6) months.
The Law sets out categories of persons and entities who act as directors of regulated mutual funds under the Mutual Funds Law (Revised), ie funds which are caught by the provisions of Sections 4(1) and 4(3) of that law.
The Law also applies to directors of certain companies which are registered with the Cayman Islands Monetary Authority (CIMA) as Excluded Persons under the Securities Investment Business Law (Revised).
The categories of directors are as follows:
Registered Director – a natural person who acts as director for less than twenty (20) funds.
Professional Director – a natural person who acts as director for twenty (20) or more funds.
Corporate Director – a body corporate appointed as a director for a fund.
In summary, the Law requires that persons, whether resident in the Cayman Islands or elsewhere, who fall within the category of Registered Directors to register with CIMA and pay a fee of US$854. Going forward, an annual fee of US$854 shall be payable by a Registered Director by January 15 in each calendar year. Details required as part of the registration process are:
1. Full name, date of birth, nationality and country of birth;
2. Address of principal residence and postal address if different;
3. Details as to any conviction of a criminal offence involving fraud or dishonesty;
4. Details as to any adverse finding, financial penalty, sanction or disciplinary action by a regulator, self-regulatory organisation or professional regulatory body; and
5. Names and registration numbers of the funds to which the applicant will act.
Registration can be carried out via the website set up by CIMA for this purpose and will be confirmed (or otherwise) within 48 hours of submission. Payment of the registration fee may only be made by credit card via the website. Annual fees are also payable via the website.
Persons who are Professional Directors, whether resident in the Cayman Islands or elsewhere, are required to be licensed by CIMA and pay a fee of US$3,658. Going forward, an annual fee of US$3,658 shall be payable by a Professional Director by January 15 in each calendar year. Exempted from licensing are persons who (a) fall within the category of Professional Directors but who are connected with entities holding a companies management licence or mutual funds administrators licence in the Cayman Islands, or (b) are connected with a fund manager regulated by certain overseas regulatory authorities1. Such persons are instead only required to register as if they were Registered Directors. Details required as part of the licensing process are similar to that for Registered Directors but with the addition of a requirement to complete an additional questionnaire, and provide evidence of insurance coverage along with three references. Licensing can be carried out via CIMA’s website with confirmation (or otherwise) of approval being provided within four weeks of submission.
Entities which are Corporate Directors, whether incorporated in the Cayman Islands or elsewhere, require to be licensed by CIMA and pay a fee of US$9,756. Going forward, an annual fee of US$9,756 shall be payable by a Corporate Director by January 15 in each calendar year. Details required as part of the licensing process can be obtained from your usual Harneys contact with applications being required to be made via CIMA’s website.
Persons who already act as directors of funds have three months from June 4, 2014 in which to apply for the appropriate registration or licence.
Corporate Directors have six months in which to apply.
Any persons or entities who have not yet acted as director for a fund are required to apply and receive the appropriate registration or licence prior to being appointed.
Any details provided as part of the registration or licensing process will not be made available to the public. The public will be able to search to determine whether a particular person or entity has been registered or licensed pursuant to the Law, however only the following details will be made available:
2. Type of registration or licence held;
3. Registration or licence number; and
4. Date on which registration or licensing was obtained.
Any change to any of the information provided as part of a registration or licensing application must be notified to CIMA via the website within 21 days of such change.
CIMA has published a set of Frequently Asked Questions on this topic which can be found here .
1 Currently the approved overseas regulators are as follows: US Securities and Exchange Commission, US Commodity Futures Trading Commission, US Financial Industry Regulatory Authority, Hong Kong Securities and Futures Commission, Japan Financial Services Agency, Monetary Authority of Singapore, UK Financial Conduct Authority, German Federal Financial Supervisory Authority, French Authorité des Marchés Financiers, Netherlands Authority for the Financial Markets, The Central Bank of Ireland, and the Luxembourg Commission de Surveillance du Secteur Financier.