CIMA introduces new director registration and licensing regime

On 4 June 2014, the Cayman Islands government brought into force the Directors Registration and Licensing Law 2014. The law provides for the registration and, in certain cases, licensing of individuals appointed as directors of (i) mutual funds regulated under the Mutual Funds Law by the Cayman Islands Monetary Authority (CIMA) or (ii) companies registered as ‘excluded persons’ under the Securities Investment Business Law (each a covered entity). The law also introduces a licensing regime for corporate directors of covered entities.

The law follows a lengthy industry consultation process that began in January 2013 when CIMA issued its Corporate Governance Private Sector Consultation Paper. This was followed a year later by CIMA releasing its Statement of Guidance on fund governance, which established key principles of good governance that must be observed by CIMA-regulated funds.

The remit of the Directors Registration and Licensing Law 2014 only covers directors of covered entities and will not apply therefore to directors of other Cayman Islands companies. Nor does the law apply to all fund entities registered with CIMA, as both CIMA-registered partnerships and trusts are outside its scope. The law does not extend therefore to directors of general partners, or to trustees, of covered entities. The law is not restricted, however, to Cayman-based directors but extends to all directors of covered entities, wherever they are resident or incorporated…

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