Director Registration and Licensing Bill FAQs (2017-10-17)

Summary

This is a CIMA general industry notice from October 2017 presenting Frequently Asked Questions on the Directors Registration and Licensing Law, 2014 (DRLL). It explains, in Q&A format, how the registration and licensing regime for directors of regulated mutual funds and certain securities investment business entities operates.

Who is covered: Natural person directors and corporate directors of "covered entities" fall under the law.
Exclusions: Trustees and partners are excluded from the regime.
Special status entities: The FAQ addresses treatment of entities in "licence under termination" or liquidation status.
Deadlines and fees: It covers application deadlines, fees, and insurance requirements.

Registration and Licensing Categories

Registration: Applies to natural persons.
Professional director licensing: Applies to natural persons acting as directors on 20 or more covered entities.
Corporate director licensing: Applies to companies acting as directors.

Practical Mechanics

Application channel: Applications and payments must be made via a web portal; no mail or email applications are accepted.
Identification numbers: Unique identification numbers are distributed through registered offices.
Document requirements: Each application type has specific document and information requirements, including personal questionnaires, reference letters, police clearance certificates, and corporate constitutional documents.

Ongoing obligations: Directors and corporate directors must pay annual fees, update information, confirm annually that there have been no changes, and maintain D&O insurance.

This document is informational and explanatory rather than a new legal instrument, but it restates and clarifies binding obligations already imposed by the underlying 2014 Law, including specific deadlines such as a 3-month application window after the Law's commencement, a 21-day update requirement, an annual fee due by 15 January, and a threshold of 20 covered entities that triggers licensing changes. It applies to natural person directors and corporate directors of Cayman Islands regulated mutual funds and certain securities investment business entities, as well as the registered offices servicing them.

Key obligations

Natural persons who are directors of a covered entity on the date the Law comes into force must submit their application for registration or licensing within 3 months after the Law comes into force.
Directors/registrants/licensees must update any changes to information previously provided to the Authority within 21 days of the change.
Registered or licensed directors (and corporate directors) must pay an annual fee to the Authority on or before 15 January of each year after their application is accepted, or incur a penalty of 1/12 of the annual fee per month outstanding.
At the time of paying the annual fee, registrants/licensees must confirm whether there have been any changes to the information previously provided, or update it if there have been changes.
A director acting on 20 or more covered entities during the year must apply for a professional director licence prior to taking on the 20th covered entity, and must surrender their registration and pay a surrender fee once the licence is approved.
Applications and payments may only be submitted through the Authority's web portal; applications by mail or email will not be processed and will be destroyed.
Professional directors (natural persons) and corporate directors must maintain acceptable Directors & Officers (D&O) liability insurance coverage.
Corporate director applicants must provide specified corporate documentation (incorporation evidence, register of shareholders/directors, memorandum and articles, good standing evidence if foreign, list of parent/subsidiary companies).
Natural person applicants for registration or licensing must provide specified personal information, and licensing applicants must additionally provide a Personal Questionnaire, three reference letters (at least one from a bank), and a police clearance certificate.
Corporate director subsidiaries not already licensed under the companies management or mutual fund administrators laws must obtain a licence under the Directors Registration and Licensing Law.

Applies to

directors of regulated mutual funds, directors of companies falling under section 5(4) and paragraphs 1 and 4 of the Fourth Schedule of the Securities Investment Business Law, registered directors (natural persons), professional directors (natural persons acting on 20+ covered entities), corporate directors (companies), registered offices of covered entities, companies management licence holders, mutual fund administrators licence holders

Deadlines

3 months after the Law comes into force: Deadline for natural person directors of covered entities to submit their application for registration or licensing.
21 days: Deadline to update the Authority with any changes to information previously provided, as required under the Law.
on or before 15 January of each year: Deadline to pay the annual fee for registered directors, licensed professional directors, and licensed corporate directors to maintain good standing.
48 hours: Typical timeframe for applicants to receive confirmation of registration under Part II of the Law.
four weeks: Typical timeframe for applicants to receive confirmation of licensing as a professional director or corporate director.