Directors Registration and Licensing Law, 2014 (Law 10 of 2014)

Summary

This is the Directors Registration and Licensing Law, 2014 (Law 10 of 2014), a Cayman Islands statute that created registration and licensing regimes for individuals and corporate entities acting as directors of 'covered entities' - meaning mutual funds regulated under the Mutual Funds Law and certain securities investment business companies caught by Schedule 4, paragraphs 1 and 4 of the Securities Investment Business Law. It applies regardless of whether the director is resident in the Cayman Islands.

Director Categories

• Registered directors: Any natural person acting as a director of a covered entity, who must register with the Cayman Islands Monetary Authority (CIMA).
• Professional directors: Natural persons appointed as directors of twenty or more covered entities, who must hold a CIMA licence, meet fit-and-proper standards, and carry minimum insurance cover.
• Corporate directors: Bodies corporate appointed as directors of covered entities, who must be licensed by CIMA, be registered as a company under the Companies Law, and appoint at least two natural persons who are themselves registered or licensed under this Law to their board.
• Exemption: Certain persons connected to companies management licence holders, mutual fund administrators, or overseas-regulated fund managers are exempted from the professional director licensing requirement but still must register.

Regulatory Framework and Enforcement

• Applications and fees: The Law sets out application processes and fees for registration and licensing.
• Annual filings: Annual filing and payment obligations are due 15 January each year, with monthly surcharges for late payment.
• Notification duty: A 21-day obligation applies to notify CIMA of changes to previously submitted information.
• CIMA powers: CIMA has powers to refuse, revoke or suspend registration or licences, and revocations are published.
• Appeals: An appeals process to the Grand Court is available.
• Offences: Criminal offences, with fines and/or imprisonment, apply for acting without registration or a licence.

The Law also allows a three-month transition period from commencement for existing directors to become registered or licensed, and gives the Cabinet power to make regulations and amend the Schedule of overseas regulatory authorities.

Key obligations

• A natural person appointed as a director of a covered entity must be registered with CIMA before acting in that capacity (existing directors had 3 months from commencement to apply).
• A natural person acting as a director for 20 or more covered entities (a professional director) must hold a valid CIMA licence, subject to certain exemptions.
• A body corporate appointed as a director of a covered entity (a corporate director) must be licensed by CIMA, be registered as a company under the Companies Law, and appoint at least two natural persons who are registered/licensed under this Law to its board, obtaining CIMA's prior written approval for new board appointments.
• Registered directors, licensed professional directors and licensed corporate directors must, on or before 15 January each calendar year, provide prescribed information to CIMA and pay the prescribed annual fee, with a monthly surcharge of one-twelfth of the fee for late payment.
• Registered directors, professional directors and corporate directors must notify CIMA within 21 days of any change in the information previously provided to CIMA.
• A professional director must at all times maintain insurance with a minimum aggregate cover of US$1,000,000 and minimum cover of US$1,000,000 per claim, and must file current insurance details with CIMA.
• Applicants must pay prescribed (non-refundable) application fees and comply with CIMA's requests for information relevant to registration or licensing.
• An applicant whose registration or licence application is refused must cease acting as a director/professional director/corporate director within the prescribed time.
• A person or entity refused registration/licence may reapply if there is a material change in relevant circumstances, and may appeal a revocation or suspension to the Grand Court within 21 days of the effective date.

Applies to

registered directors, professional directors, corporate directors, mutual funds regulated under the Mutual Funds Law, companies to which Schedule 4 paragraphs 1 and 4 of the Securities Investment Business Law apply, companies management licence holders, mutual fund administrators

Deadlines

• within three months of the date of commencement of this Law: Existing directors of covered entities (as at commencement) must apply for and obtain registration to avoid contravening the Law.
• within three months of the date of commencement of this Law: Existing professional directors must be licensed to avoid contravening the Law.
• on or before the 15th January in each calendar year: Registered directors, licensed professional directors and licensed corporate directors must submit prescribed information and pay the prescribed annual fee to CIMA; late payment incurs a monthly surcharge of one-twelfth of the fee.
• within twenty-one days of the change: Registered directors, professional directors and corporate directors must notify CIMA of any change to previously submitted information.
• within twenty-one days of the effective date of the revocation: A registered director, professional director or corporate director may appeal to the Grand Court against CIMA's decision to cancel/suspend registration or revoke/suspend a licence.
• within fourteen days of receipt of the refusal notice: An existing director subject to a refusal notice may request reconsideration from CIMA.

Related documents

• Directors Registration and Licensing (Amendment) Act, 2023 (Act 3 of 2023) amends this document
• Directors Registration and Licensing (Amendment) Law, 2015 (Law 5 of 2015) amends this document
• Directors Registration and Licensing (Registration and Licensing) Regulations, 2014 is made under this document