According to the Cayman Islands Directors Registration and Licensing Act (the "Act"), a person named as a director of certain entity types (referred to in the Act as "covered entities") are required to register with the Cayman Islands Monetary Authority ("CIMA"). As part of their role, such directors should understand the rules for registration, annual renewal, updating of director information and de-registration – and the consequences for not adhering to these rules.
For the purposes of Cayman Islands regulation, covered entities are defined as a company under which certain provisions of the Securities Investment Business Law apply; or a mutual fund as regulated under the Mutual Funds Law. Depending on the prospective director's circumstances, before being appointed to the board of a covered entity, a director must be registered or licensed with CIMA.
Any new board appointees thus should submit any registration under the Act as soon as possible via CIMA's dedicated webpage. The initial fee is currently US$854, payable by credit card. Directors need to renew their registration on an annual basis every 15 January, which entails paying a yearly fee of US $854 to CIMA as well as confirming and updating any information that has been filed with CIMA. Throughout the year, directors must inform CIMA of any changes to director information within 21 days of the change.
Surrendering as a Director and the De-registration Process
The Act includes a provision for a surrender mechanism that allows registered / licensed directors to relinquish their official status as directors of covered entities. The application to surrender and the accompanying de-registration fee must be filed and paid by 31 December to avoid incurring unnecessary registration fees for the following year.
Not registering, renewing, updating director information or de-registering in keeping with deadlines may result in penalties ranging from fees and fines to imprisonment.
The Benefits of Outsourced Director Registration and Licensing
Routine tasks such as director registrations and licensing, while important to business compliance and operations, can draw away from business' core functions. Service providers can work with people to be appointed as directors to coordinate director registration and licensing submissions, including payment of any respective fees to CIMA.
Director registration services include:
- Registration: Compiling and submitting director information and arranging payment of the initial application and registration fee via the CIMA web portal;
- Annual renewal: Conducting a review of director information, submission of necessary updates through the CIMA web portal and arrangement of the annual registration fee;
- Information updates: Submission of updated director information via the CIMA web portal when notified by the director of changes; and
- De-registration: Completion of the form prescribed by CIMA to surrender registration and arrange payment of the de-registration fee through the CIMA web portal.
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.
