THE DIRECTORS REGISTRATION AND LICENSING (REGISTRATION AND LICENSING) REGULATIONS, 2014 (the "Law")
The new Law requiring registration and licensing of Directors of a regulated Cayman Mutual Fund (but not a private equity vehicle) and most entities involved in securities business which are exempted by CIMA from licensing under the Securities Investment Business Law, is now effective.
- The effective date of the Law is 4th June 2014.
- The Law applies to directors of a covered entity that is (1) regulated under the Mutual Funds Law (2013 Revision) or (2) regulated under section 5(4) and paragraphs 1 and 4 of the Fourth Schedule of the Securities Investment Business Law (2011 Revision).
- A non-professional director being a person acting for less than twenty (20) of such companies and a professional director, being a person acting for more than twenty (20) covered entities, must be licensed within three (3) months of June 4, 2014. A corporate director must be licensed within six (6) months of June 4, 2014.
- Despite popular comment to the contrary, the database of registered and licensed directors will not be available to the public. A search of the database will reveal only the name of the director the type of registration or license number and the date of registration or licensing.
- The registered office of each covered entity will receive a unique identification number for each director of a covered entity at that registered office. Registration or licensing can then be undertaken but only via the CIMA web portal.
- Non-professional directors seeking registration will be
required to file the following information:
- Full legal name;
- Date and place of birth;
- Nationalities;
- Principal and postal address;
- Email address and telephone number;
- Whether convicted of a criminal office involving fraud or dishonesty; and o Whether the subject of an adverse finding, financial penalty, sanction, disciplinary action or proceeding by a regulator, self-regulatory organization or a professional disciplinary body.
- CIMA may refuse to register a non-professional director if the Authority has information that a) he has been convicted of a criminal offence involving fraud and/or dishonesty or b) he has been convicted of an adverse finding, financial penalty, sanction or disciplinary action or proceeding by a regulator, self-regulatory organization or a professional disciplinary body.
- A director serving on more than twenty (20) covered entities
must be licensed as a professional director unless:
- he is a director, employee, member or officer of a holder of a Companies Management License or a Mutual Fund Administrator's license, in which case, he is nevertheless required to be registered (as a non-professional director as above); or
- he is a director of a covered entity only by virtue of his association with a Fund Manager of a Regulated Mutual Fund and that Fund Manager is licensed by a recognised overseas regulatory authority. In that event, such person is again required to be registered (as a non-professional director as above).
- A professional director must satisfy the Authority that he has sufficient capacity to carry out his duties and that he is a fit and proper person which implies the same tests as contained in the Mutual Funds Law.
- Only a professional director is required to be covered by D&O insurance which may be that established by the covered entity but in a minimum amount of US$1m per claim. Coverage may be in place with a non Caymanian Insurer.
- A professional director making application for a license must
make application through the web portal and provide the following
information:
- Full legal name;
- Date and place of birth;
- Nationalities;
- Email address and telephone number;
- A fully completed Personal Questionnaire (already available on the Authority's website at www.cimoney.com.ky);
- Three reference letters, at least one of which must be from a bank; and
- A copy of a recent police clearance certificate.
- Somewhat more complex provisions apply to the licensing of a corporate director.
- Fees:
- A non-professional director shall pay an application fee of US$171 together with a fee of US$682 on application and on or before January 15 of each year subsequently pay a fee of US$854;
- A professional director shall pay an application fee of US$610 together with a fee of US$3,049 on application and on or before January 15 of each year subsequently pay a fee of US$3,658.
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.
