This memorandum has been prepared for the assistance of anyone, whether resident in the Cayman Islands or not, who is considering acting as a director of a company that is or will be a covered entity (as defined in the Directors Registration and Licensing Law, 2014 (the Law).  It is intended to provide a summary of the Law and details of how to apply for registration or licensing under the Law and is not to be taken as specific legal advice applicable to any particular issues or circumstances.

1 Registration and Licensing Framework

1.1 Covered entities

The Law applies to directors of a covered entity, which is defined as:

  • a company to which paragraphs 1 and 4 of Schedule 4 of the Securities Investment Business Law (Revised) (SIB Law) apply; or
  • a mutual fund regulated under the Mutual Funds Law (Revised).

In summary, the Law covers all directors of Cayman registered mutual funds and certain vehicles carrying on securities investment business, including most Cayman investment management and investment advisory companies, regulated or registered with the Cayman Islands Monetary Authority (CIMA).  It requires directors of such entities to be registered with or licensed by CIMA.

The Law does not affect directors of other types of Cayman companies, for example finance SPVs, portfolio acquisition companies and other private holding or subsidiary companies which are not covered entities regulated by or registered with CIMA.

1.2 Residency

The Law applies to directors whether or not they are resident in the Cayman Islands.

1.3 Qualifications

Under the Law there is no requirement for technical qualifications in order to serve as a director of a covered entity.  However CIMA may refuse to register an applicant who has been convicted of a criminal offence involving fraud or dishonesty or who is the subject of an adverse finding, financial penalty, sanction or disciplinary action by a regulator, self-regulatory organization or a professional disciplinary body.  This is not limited by materiality or time, so all such details must be disclosed.

In addition, for professional directors and corporate directors (described below), such persons will be subject to CIMA's fit and proper test having regard to such director's honesty, integrity and reputation, competence and capability and financial soundness.

1.4 Types of Directors

Directors of covered entities are divided into three categories: registered directors, professional directors and corporate directors.  Different requirements apply to each category.

  • Registered Directors

A natural person appointed as a director of fewer than 20 covered entities is required to be a registered director. Registered directors are not, as such, regulated by CIMA.

The registration fees (including the application fee) payable to CIMA for a registered director are US$853.66.

  • Professional Directors

Professional directors are defined as natural persons appointed as directors for 20 or more covered entities.  There are important exceptions in the case of representatives of some investment managers and other licensees, as discussed in section 1.5 below.

Professional directors must apply for a license and, if successful, are regulated by CIMA under the Law.  CIMA may grant a professional director license with such conditions as it considers appropriate.

The licensing fees (including the application fee) payable to CIMA for a professional director are US$3,658.54.

  • Corporate Directors

A body corporate appointed as a director for one or more covered entities must apply for a license and, if successful, will be regulated as a corporate director under the Law.  Again, CIMA may grant a corporate director license with such conditions as it considers appropriate.

The corporate director licensing regime also requires that the corporate director:

- be a company incorporated under, or registered as a foreign company under, the Companies Law (Revised); and

- appoint to its board at least two natural persons who are registered or licensed under the Law.

A non-Cayman company which wishes to serve as a director of a covered entity would therefore need to register as a foreign company under the Companies Law (Revised) in addition to applying for a corporate director license.

The licensing fees (including the application fee) payable to CIMA for a corporate director are US$9,756.10.

1.5 Exemptions from Professional Director License Requirement

There are two instances where, despite acting as a director for 20 or more covered entities, a person would not need to be licensed as a professional director and would only need to apply to be a registered director:

(a) where the applicant will be a director, an employee, a member, an officer, a partner, or a shareholder of a holder of a companies management license or a mutual fund administrators license.  This avoids the need for such individuals to be effectively regulated in respect of the same activities under two separate laws; and

(b) where:

- the applicant is a director, an employee, an officer, a partner, or a shareholder of a fund manager of a mutual fund regulated under the Mutual Funds Law (Revised);

- that fund manager is registered or licensed by an overseas regulatory authority listed in the Schedule of the Law - see list attached as Appendix C; and

- the person (A) acts as a director for a covered entity by virtue of that person's relationship to that fund manager, and (B) is a registered director under the Law.

As an example, where a U.S. fund manager registered with the SEC manages, say, 25 CIMA-registered Cayman funds, and the managing member of the U.S. manager serves as a director on each of the offshore boards, that managing member must register in Cayman as a registered director but will not need to register as a professional director.

1.6 Securities Investment Business Law

This section 1.6 is not relevant for persons who intend to serve only as directors of mutual funds and not, for example, as directors of Cayman companies acting as investment managers or investment advisors.

As noted above, the definition of "covered entity" includes a company to which paragraphs 1 and 4 of Schedule 4 of the SIB Law apply.

Paragraph 1 of Schedule 4 covers a company within a group of companies carrying on securities investment business exclusively for one or more companies within the same group.

Paragraph 4 of Schedule 4 covers a person carrying on securities investment business (which includes investment management and investment advisory services) exclusively for one or more of the following classes of persons:

(a) a sophisticated person;

(b) a high net worth person; or

(c) a company, partnership or trust (whether or not regulated as a mutual fund) of which the shareholders, unit holders or limited partners are one or more persons falling within (a) or (b).

"Securities investment business", "sophisticated person" and "high net worth person" are themselves defined terms, but most commonly this category applies where the vehicle in question provides investment management and investment advisory services only to CIMA registered funds and/or other vehicles with a minimum initial investment requirement of at least US$100,000.

These entities are "excluded persons" under the SIB Law so that, although they are carrying on securities investment business, they are not required to obtain a licence under the SIB Law and are simply required to register with CIMA.

2  Application Process

2.1 Registered Directors

Application for registration in the case of registered directors or for a licence in the case of professional or corporate directors must be made in the prescribed form to CIMA and submitted with the prescribed fee.  The following process must be followed for an individual to be registered as a registered director:

  • Confirm that the individual falls within the definition of a "registered director".  See flowchart attached as Appendix A.
  • Identify all covered entities for which the individual proposes to act, together (in the case of those covered entities already licensed or registered with CIMA) with their CIMA registration numbers.  The registration numbers can be found through the CIMA website (\).
  • Log on to CIMA's web portal   ( ) and follow the instructions set out in the portal and in the attached Appendix B.
  • Provide the information applicable to the particular type of registration sought - this is summarised in the attached Appendix C.
  • Make payment.

The application must be completed with all due care: there are stiff penalties for knowingly or recklessly furnishing any information, providing any explanation or making any statement to CIMA which is false or misleading.

Applicants should receive confirmation of registration within 48 hours.

2.2 Professional Directors and Corporate Directors

  • Confirm that the individual falls within the definition of a "professional director" or "corporate director".  See flowchart attached as Appendix A.
  • Seek legal advice from your usual contact at Ogier or any of the Ogier individuals listed below, to assist with the licence application.


CIMA has published FAQs, which are available on their website (

3 Timing

No person may be appointed as a new director of a covered entity until such person has submitted an application to be registered/licensed under the Law.

In the case of a mutual fund seeking to be registered with CIMA, no director may be appointed to the board of that mutual fund who is not already registered or licensed with CIMA under the Law.

Application for registration or licensing should therefore be made as soon as possible to avoid any delays in appointment of appropriate directors.

4 Ongoing Requirements

4.1 Annual Fees

Registered, professional and corporate directors have to pay annual fees to CIMA to maintain their respective registrations or licenses. Such fees must be paid on or before 15 January in each calendar year to avoid penalties.

4.2 Insurance Coverage

The Law requires that professional directors and corporate directors be covered by insurance against loss arising from claims in respect of civil liability incurred in connection with business of the professional/corporate director.  Such insurance must have a minimum aggregate cover of US$1.25m and minimum cover of US$1.25m for each and every claim.

There is no requirement under the Law for registered directors to maintain insurance coverage.

4.3 Notification of Changes

If there is any change to the information provided to CIMA in an application for registration or the grant of a license under the Law, the relevant director is required to inform CIMA within 21 days of the change.  Again, there is no materiality threshold and there are significant penalties for failing to comply with this requirement.

5 CIMA's Powers

CIMA has extensive powers of inspection and inquiry under the Law.  CIMA may also cancel, suspend or revoke the registration/license of a director and may impose such conditions as it thinks fit.

6 Maintenance of Registration Data

CIMA maintains a register of directors which contains particulars of each registered director, professional director or corporate director.  This includes:

  • the director's name and address;
  • the date of registration or the date on which a license was issued, as applicable; and
  • any other information that may be prescribed.

For the time being, this information is not publicly available but may be accessible on a regulator-to-regulator basis using existing inter- governmental protocols. CIMA has addressed public availability in their FAQs as follows:

"This database will be maintained by [CIMA] in accordance with the confidentiality provisions under section 50 of the Monetary Authority Law (2013 Revision).  In practice, this means that your information will not be made available to the public, and your information is protected from freedom of information requests.  However, the public will be able to search for your name to see whether you have been registered or licensed in accordance with the Law.  The results of any search for your license or registration status will only show your name, the type of registration or license you hold, your registration/license number and the date on which you were licensed or registered.  While the creation of a public database has been discussed, it does not form part of this Law."

At the date of this client briefing, the public search function has not been activated.

7 Further Advice

This client briefing has been prepared for clients and professional associates of Ogier.  The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations. Please contact your usual contact at Ogier or any of the Ogier individuals listed here to assist with you registration or licensing application.

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.