The Directors Registration and Licensing Act, 2014 (the “Act“) requires all directors of (a) investment funds regulated under the Mutual Funds Act (2021 Revision) of the Cayman Islands and (b) companies registered as excluded persons pursuant to the Securities Investment Business Act (2020 Revision) of the Cayman Islands (collectively “Covered Entities“) to be registered or licensed under the Act.

The Act places directors of Covered Entities into three categories:

• Natural Persons who will serve as directors of fewer than twenty (20) Covered Entities (“Registered Directors“);

• Natural Persons who will serve as directors of twenty (20) or more Covered Entities (“Professional Directors”); and

• Body corporates that will serve as directors of Covered Entities (“Corporate Directors“)^[1].

Registered Directors will be required to register with the Cayman Islands Monetary Authority (“CIMA“) while Professional Directors and Corporate Directors will be required to be licensed by CIMA.

The Act applies to all directors of Covered Entities regardless of their domicile or place of incorporation.

Are there persons who may be exempt or otherwise excluded in some way from the registration or licensing requirements of the Act?

• Persons who fall within the category of Professional Directors who are directors, employees, members, officers, partners or shareholders of (a) entities holding a companies management licence or mutual funds administrators licence in the Cayman Islands, or (b) a fund manager of a regulated mutual fund which fund manager is regulated by certain overseas regulatory authorities are exempted from licensing. Notwithstanding this exemption from licensing, these persons will be required to be registered under the Act.

• Persons who fall within the category of Corporate Directors which hold a Cayman Islands companies management licence or a mutual fund administrators licence are not required to be separately licensed under the Act.

• The Act is not applicable to trustees (regulated under the Banks and Trust Companies Act (2021 Revision)), or partners of partnerships or to directors of companies in liquidation.

When should proposed directors apply to be registered or licensed?

Persons proposed to be appointed to the board of Covered Entities are required to complete registration PRIOR to their appointment.

How do proposed directors apply to be registered or licensed under the Act?

The proposed director of a Covered Entity will need to:

• request an identification number from CIMA’s director gateway;

• on receipt of the unique identification number, submit their application form through CIMA’s dedicated web portal; and

• submit the prescribed payment.

For both types of applicants the online application process is commenced via CIMA’s director gateway at the following address https://gateway.cimaconnect.com/.

Only online applications will be accepted and payments will only be accepted online by VISA or MasterCard.

What fees are payable on registration or licensing?

A fee is payable on registration and following registration there is an annual fee which is payable no later than the 15^th of January in each year. The fee payable in each instance is as follows:

• Registered Directors – US$853.66

• Professional Directors –              US$3,658.54

• Corporate Directors –  US$9,756.10

How long does the registration / licensing process take?

Persons seeking registration as Registered Directors should expect the registration process to be completed within 48 hours of application.

Persons seeking to be licensed as Professional Directors or Corporate Directors should expect the registration process to be completed within 4 weeks of application.

Are there any ongoing obligations?

In addition to submitting the annual fee by the 15^th of January of each year, directors are also required to confirm the accuracy of their current registration information. Directors are required to file with CIMA any material change to the information provided in their application within 21 days of the change taking effect.

May CIMA refuse to register or license an applicant?

Yes – CIMA may decline to register or license an applicant in its discretion. Examples of instances where CIMA may refuse registration include where CIMA has information that the applicant has been convicted of a criminal offence involving fraud or dishonesty, or is the subject of an adverse finding, financial penalty, sanction or disciplinary action by a regulator, self-regulatory organization or a professional disciplinary body. CIMA may also refuse to license an applicant where the applicant is not a fit and proper person for licensing or does not have sufficient capacity to carry out duties as a professional director.

Is there a requirement to obtain directors’ insurance?

Corporate Directors and Professional Directors will be required to obtain insurance as prescribed by the Act.

Will information provided to CIMA be publicly available?

CIMA will maintain a database of directors of Covered Entities which will not be publicly accessible or subject to freedom of information requests. The only information which will be publicly available is:

• the name of director who is registered or licensed with CIMA;

• the type of registration or license held;

• the registration or license number issued to the director; and

• the date on which registration or licensing was obtained.

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