Cayman Islands Fund Directors Registration and Licensing Law implemented
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The Cayman Islands government has approved the Directors Registration and Licensing Law, 2014 (the “Law”), effective 4 June 2014.
Under the Law, all directors of covered entities, that is, mutual funds regulated under the Mutual Funds Law (2013 Revision) or directors of companies registered as “excluded persons” under the Securities Investment Business Law (2011 Revision), is required to register/license with the Cayman Islands Monetary Authority (CIMA).
The requirement applies to both executive and non-executive directors, regardless of whether they reside in the Cayman Islands. Directors are now categorized into:
Registered Directors: A natural person acting as a director for 20 or more Covered Entities.Corporate Director: A body corporate appointed as a director for a Covered Entity.Registered Director: A natural person acting as a director for a Covered Entity.
There are limited circumstances where Professional Directors will not need to apply for a license and would only need to register on the basis they will be regulated through their local regulators.
CHARACTERISTICS OF A DIRECTOR
CIMA may not grant a license unless it is satisfied that the applicant has:
Sufficient capacity to carry out its duties, and;The director is fit and proper for licensing as a director, with references to honesty, integrity and reputation; competence and capability; and financial soundness.
Individual directors of covered entities that are already acting in that capacity prior to the Law are given three months of the effective date to register with CIMA. Corporate directors will have a period of six months in which to obtain their license. Failure to comply with the Law will result in financial penalties or may even lead to imprisonment.
Persons who are not previously a director will need to be registered or licensed prior to their appointment.
Application is done through CIMA’s web portal, entailing personal details, supporting documents/evidence, and payment of fees.
CHANGE IN INFORMATION
A registered director is required to inform CIMA within 21 days if there are any changes to the information on which CIMA relied on for the registration or licensing of a director.
The director must before the 15th of January each year submit their annual fees to CIMA:
Registered Director: US$87 per annum
Professional Director: US$3,750 per annum
Corporate Director: US$10,000 per annum
Late payments would incur a penalty of one twelfth of the annual fee per month.