From Solomon Harris

The Directors Registration and Licensing Law 2014

The Directors Registration and Licensing Law 2014 (the “Law”) has come into force with effect from June 4th. Individual directors of entities covered by the Law have until 21st August 2014 to obtain a registration or licence. Corporate directors have until 21st November 2014 to obtain a licence. New directors must be licensed or registered before they are appointed.

Who is affected by the Law?

The Law applies to the directors of “Covered Entities” which are (i) corporate entities that are regulated mutual funds and (ii) corporate entities that are registered as “excluded persons” under the Securities Investment Business Law (2011 Revision), which will cover most Cayman-based fund managers.

Individuals that are directors of fewer than 20 Covered Entities are required to register with the Monetary Authority. Individuals that are directors of 20 or more Covered Entities are deemed to be “professional directors” and must obtain a licence under the Law unless they are exempted under section 16 of the Law in which case they need only register. Exemption from licensing under section 16 is available to individual directors that are associated with (i) the holder of a companies management licence or a mutual funds administrators licence, or (ii) a fund manager that is regulated outside of Cayman by an approved regulator and where the fund of which they are a director is a regulated mutual fund. Corporate directors of Covered Entities must be licensed.

How does the registration and licensing process work?

The registered office of each Covered Entity will receive a list of directors that are subject to the Law. The list will provide a unique identification number for each director which can be used to register or apply for a licence via the Monetary Authority’s registration portal at https://gateway.cimaconnect.com/ . Along with the applicable fee, applicants for registration or licensing must submit certain information to the Monetary Authority along with their application:

Applicants for registration (other than those exempted from licensing under section 16 of the Law) must provide:

The applicant’s full name, date of birth, nationality and country of birth;

The address of the applicant’s principal residence, and postal address if different;

Details of whether the applicant has ever been convicted of a criminal offence involving fraud or dishonesty;

Details as to whether the applicant has ever been the subject of regulatory action; and

The names and registration numbers of the Covered Entities for which the applicant acts as director.

Applicants for registration pursuant to section 16 of the Law must provide:

The applicant’s full name, date of birth, nationality and country of birth;

The address of the applicant’s principal residence, and postal address if different;

The names and registration numbers of the Covered Entities for which the applicant acts as director;

A completed personal questionnaire in the form provided by the Monetary Authority;

For directors associated with the holder of a mutual funds administration licence or a companies management licence, the name and licence number of licence holder and confirmation of their connection with that licence holder;

For directors associated with a fund manager that is regulated outside of Cayman by an approved regulator: details relating to the fund manager and its regulatory status, and confirmation that the applicant’s directorships are by virtue of the applicant’s relationship with the fund manager.

Individuals applying for a licence must provide:

The applicant’s full name, date of birth, nationality and country of birth;

The address of the applicant’s principal residence, and postal address if different;

A completed personal questionnaire in the form provided by the Monetary Authority;

Three references, including character and financial standing and a police certificate;

The names and registration numbers of the Covered Entities for which the applicant acts as director; and

Evidence of insurance coverage.

Corporate entities applying for a licence must provide:

Evidence of incorporation;

The names and registration numbers of the Covered Entities for which the applicant acts as director;

Names, addresses and nationalities of each shareholder with 10% or more of the issued share capital or voting rights;

A completed questionnaire from all directors, managers and officers of the applicant and all shareholders and beneficial owners with a 10% or more of the issued share capital or voting rights;

Three references, including character and financial standing, and a police certificate for each director, manager, shareholder/ beneficial owner with 10% or more of the issued shares or voting rights;

Constitutional documents of the applicant verified by a statutory declaration of a director;

Names and addresses of the principal and registered office of all parent and subsidiary companies of the applicant;

A certificate of good standing for all parent and subsidiary companies licensed or registered overseas;

A certificate of good standing from all overseas regulatory authorities that regulate the applicant; and

Evidence of insurance coverage.

If any of the above information changes directors are expected to provide the updated information to the Monetary Authority within 21 days.

What are the fees?

Registration: an application fee of US$170.73 plus a fee of US$682.93, and then an annual fee of US$853.66 due each year by January 15th.

Licence (professional director): an application fee of US$609.76 plus a fee of US$3,048.78, and then an annual fee of US$3,658.54 due each year by January 15th.

Licence (corporate director): an application fee of US$975.61 plus a fee of US$8,780.49, and then an annual fee of US$9,756.10 due each year by January 15th.

What are the next steps?

You should be contacted shortly by your registered office provider with an identification number for each director and instructions on how to proceed. You can then access the portal (linked above) to complete the registration.

How can Solomon Harris help?

Solomon Harris can help you comply with the Law by identifying your compliance obligations and coordinating the registration or licensing process for affected directors. Additionally, if you have any questions regarding the application process or the provisions of the Law please get in touch with your Solomon Harris contact or with Simone Proctor ([email protected]) or visit to our website www.solomonharris.com and we will be happy to assist you.

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