The Directors Registration and Licensing Law 2014 (the “Directors Law”) – is now in force from 4 June 2014

 CLICK HERE FOR THE LAW AND REGULATIONS

The Directors Registration and Licensing Law 2014 came into force on 4 June 2014.  It requires the registration of all directors of mutual funds that are registered with the Cayman Islands Monetary Authority (CIMA) and the registration of all directors management companies that are Excluded Persons under SIBL.  There is a three month period from 4 June 2014 to comply with the Directors Law.

The particular points of note are:

Scope

The Directors Law applies to directors whether or not they are located in the Cayman Islands (Section 3).

Registered Director (Section 4)

The concept of a ‘registered director’ has been been introduced which requires every director regardless of where they are located to be registered with CIMA when they act as a director of a mutual fund or SIBL Excluded Person manager that is registered with CIMA.

This will include:

-       A fee will be payable on the first registration and annually (the first year application fee US$171 and first year annual fee upon registration of US$659 thereafter the annual fee is US$854);

-       An online form to be completed on CIMA’s website and updated annually; and

-       Notification within 21 days of any changes in the information provided to CIMA.

Once the application is made then the director can continue to act until a determination is made by CIMA.

Professional Director (Section 9)

The concept of a ‘professional director’ has been introduced for a director that has 20 or more appointments to mutual funds and/or SIBL Excluded Person managers.

All professional directors are required to:

-       be licensed as a professional director (newly created under this Law); or

-       be employed by an entity holding a CIMA issued Companies Management License; or

-       be employed by an entity holding a CIMA issued Mutual Funds Administrators License.

 

Exception where the director is employed by the manager

There is an exception for the licensing as a professional director where the person is  employed by the manager to the mutual fund or a SIBL Excluded Person where that manager is regulated by the US SEC, US CFTC, US FINRA, Hong Kong, SFC, Japanese FSA, Singapore MAS, U.K. FCA, German BaFin, French AMF, Dutch AFM, Irish CBI, Luxembourg DFSA and Brazilian CVM.

Corporate Directors

The Law introduces a licensing requirement for all corporate directors that act as a director for one or more CIMA registered mutual funds or SIBL Excluded Person managers.

All corporate directors that require a corporate director license shall be:

-       a Cayman Islands ordinary resident company (The Law specifically mentions that where the corporate director is not a Cayman Islands ordinary resident company it will take steps within six months of the Law becoming law to become an ordinary resident company – Section 19); and

-       have two natural persons as directors that are already licensed under the Law

There are exclusions where the corporate director provides natural persons to act as a director and it holds a CIMA issued Companies Management License or a CIMA issued Mutual Funds Administrators License.

CIMA’s enhanced powers

Under the Law CIMA shall:

-       review the requirements for the qualification of directors in the Cayman Islands.

-       examine the capacity of registered and professional directors and give directions where necessary.

CIMA now has the power to:

-       cancel or suspend the registration of a director.

-       suspend or revoke a license (there is a 7 day appeal to the Grand Court of the Cayman Islands).

-       impose conditions on a registered director.

-       require a registered director to cease acting in a course of action.

 

How does a director register?

CIMA have now written to all the registered offices in the Cayman Islands and provided the unique code for each director to use to register on CIMA’s portal. If you are a director of a Cayman Islands mutual fund or SIBL Excluded Person (i.e. company manager excluded under SIBL from registration) then the registered office will shortly contact you with your login ID.

Please feel free to email with any questions victor.murray@mgcayman.com