After much speculation, the Cayman Islands Government announced in March 2014 the proposed introduction of a new registration and licensing regime for directors of certain regulated entities in the Cayman Islands.
After industry review and consultation, The Directors Registration and Licensing Law 2014 (Law) has been passed, but is yet to come into force. However, certain key elements of the new registration and licensing regime have yet to be released – including the hotly debated fee levels.
All directors of regulated mutual funds under the Mutual Funds Law (2013 Revision) of the Cayman Islands and companies licensed under the Securities Investment Business Law (2011 Revision) of the Cayman Islands (Covered Entities) will be caught by the Law.
Licensed or Registered?
Professional Directors, holding directorships of 20 or more Covered Entities, will be required to apply for a license under the Law. Only where the Professional Director is also a director, employee, member, officer, partner or a shareholder of (i) a company which holds a Companies Management License or a Mutual Fund Administrator's License in the Cayman Islands, or (ii) a Fund Manager that is registered or licensed by a specified overseas regulatory authority and such director appointment arises by virtue of the relationship with the Fund Manager, will the Professional Director be excluded from obtaining a license under the Law.
All other natural persons who are directors of Covered Entities and Professional Directors who are excluded from the requirement to obtain a license under the Law as set out in (i) or (ii) above, will need to apply to be registered under the Law.
To register or apply for a license, a director must submit an application in a prescribed form to CIMA together with the relevant fee (amount to be determined).
Once licensed or registered, any material change to the information supplied on the initial application will need to be filed by the director within 21 days of the change taking effect. Annual filing together with an annual fee (amount to be determined) will also need to be filed and paid by the director no later than 15 January in each calendar year.
There will be a three month grace period, after the Law comes into force, for natural persons who are currently acting as directors of Covered Entities to either register or apply for a license.
Persons who are to be appointed as directors after the Law comes into force will need to be registered or licensed, as applicable, prior to their appointment.
For corporate directors, irrespective of directorship numbers held, a separate licensing regime applies and they will have up to six months from the Law coming into force to apply for a license.
How Appleby can help
Appleby can assist investment managers and governing bodies of Funds with their review and compliance with the Law. A dedicated and skilled team of professionals are available to assist our Fund clients through the new regulatory landscape.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.