The Cayman Islands Director Registration and Licensing Law (the Law) came into force in 2014, requiring directors of Cayman "covered entities" to register or become licenced by the Cayman Islands Monetary Authority (CIMA).
The Law applies to directors of the following covered entities:
- Persons and entities who act as directors of companies which are regulated mutual funds under Sections 4(1) and 4(3) of the Mutual Funds Law
- Directors of certain companies which are registered with CIMA as Excluded Persons under the Securities Investment Business Law (the SIB Law), and
- Persons and entities who act as managers of LLCs1 which are regulated mutual funds under the Mutual Funds Law or Excluded Persons under the SIB Law. References to directors in this Guide includes managers of LLCs which are covered entities.
The categories of directors are as follows:
- Registered Director - a natural person who acts as director for less than twenty (20) covered entities
- Professional Director - a natural person who acts as director for twenty or more covered entities
- Corporate Director - a body corporate appointed as a director for covered entities
The Law requires that persons, whether resident in the Cayman Islands or elsewhere, who fall within the category of Registered Directors must register with CIMA and pay a fee of US$854. Once registered, an annual fee of US$854 is payable by a Registered Director to CIMA by January 15 in each calendar year. Details required as part of the registration process are:
- Full name, date of birth, nationality and country of birth;
- Address of principal residence and postal address, if different;
- Details of any conviction of a criminal offence involving fraud or dishonesty;
- Details of any adverse finding, financial penalty, sanction or disciplinary action by a regulator, selfregulatory organisation or professional regulatory body; and
- Names and registration numbers of the covered entities for which the applicant will act.
Registration is 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. Once licensed, an annual fee of US$3,658 is payable by a Professional Director to CIMA 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 authorities (which includes the US Securities Exchange Commission and the United Kingdom Financial Conduct Authority). 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, are required to be licensed by CIMA and pay a fee of US$9,756. Once licensed, an annual fee of US$9,756 is 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 made via CIMA's website.
Any persons or entities who have not yet acted as director for a covered entity are required to apply and receive the appropriate registration or licence prior to being appointed. Directors who do not register or become licensed as required under the Law commit an offence and are liable on conviction to a substantial fine and / or 12 months imprisonment.
Any details provided as part of the registration or licensing process will not be made available to the public. It is intended that in the future, 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:
- Type of registration or licence held;
- Registration or licence number; and
- 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 their website within 21 days of the change.