This advisory provides guidance for those directors who are registered with the Cayman Islands Monetary Authority (CIMA) under the Directors Registration and Licensing Law (Revised) (DRLL) as a result of being appointed as a director of a 'covered entity' (a Cayman Islands investment fund registered with CIMA under the Mutual Funds Law or an entity, such as an investment manager, that is registered as a 'registered person' under the Securities Investment Business Law). Note that investment funds regulated under the Private Funds Law are not currently covered entities and directors of such entities are not required to be registered. If you have any questions as to whether or not you are required to take any action, please speak to your usual Ogier contact or a member of our team listed here.
Should you renew or cancel your registration?
Renewal: You must pay 2021 renewal fees if as at 1 January 2021, you will remain appointed as a director of a covered entity for some or all of 2021 (this includes where a covered entity has not completed its de-registration process with CIMA on or before 31 December 2020).
Cancellation: You must cancel your registration on or before 31 December 2020 if you wish to avoid 2021 annual fees, but you may only cancel your registration if you have resigned or been removed as a director, or because the covered entity has successfully completed its de-registration from CIMA on or before 31 December 2020.
You may choose to pay renewal fees even though you will not remain appointed as a director of a covered entity as at 1 January 2021, if you know or expect that you will be appointed as director of a covered entity during 2021.
What are the fees and deadlines for payment?
Renewal: payment of US$853.65 must be made on or before 15 January 2021. Payments received after 15 January 2021 will incur penalties. Accordingly, renewals should be addressed as soon as possible.
Cancellation: de-registration and the payment of the cancellation fee of US$731.71 must be completed on or before 31 December 2020. If payment of the cancellation fee is received after that date CIMA will charge full registration fees for 2021 (without any offset) and penalties will accrue if such registration fees are not then paid in full on or on or before 15 January 2021.
How to renew or cancel?
Renewing
a. Log on to CIMA's portal https://gateway.cimaconnect.com/ by using the login credentials previously supplied to you on registration. If you have forgotten your password, please use your email and the "forgot password" link on the home page to reset.
b. Follow the instructions to make your payment.
Cancelling
a. Log on to CIMA's portal https://gateway.cimaconnect.com/ by using the login credentials previously supplied to you on registration. If you have forgotten your password, please use your email and the "forgot password" link on the home page to reset.
b. Select 'Manage Directorships' and follow the instructions to remove the director, including uploading a resignation letter. Once payment of the de-registration fee has been made select 'surrender' and confirm that:
(i) the director has resigned from all covered entities;
(ii) the director no longer plans to act as a director on covered entities; and
(iii) if the director would like to act on any other covered entity or wish to resume directorship services in future, the director will need to re-apply for registration.
Ogier can provide a sample letter of resignation or more general assistance in completing the process if required.
Administrative Fines Regime
With the recent implementation of the Monetary Authority (Administrative Fines) (Amendment) Regulations, 2020 (Regulations), CIMA may impose administrative fines upon individuals and entities who are in breach of certain prescribed regulatory laws, including the DRLL.
Directors that are registered with CIMA should note that if they fail to inform CIMA of any change in their information provided to CIMA within 21 days of the change (e.g. ceasing to act as a director of a fund), this would be categorised as a serious breach. Failure to pay the annual director registration fee with CIMA by 15 January 2021 would be categorised as a minor breach, with a further minor breach of the Regulations for each month that the annual fee is not paid.
It should be noted that the good standing of a covered entity with CIMA would be blocked by the failure of a relevant director to renew their DRLL registration. Accordingly, there is also the potential for a missed DRLL renewal to lead to breaches of the regulations by covered entities, with some breaches being categorised as a very serious breach, attracting an administrative fine of up to US$1,219,5121. Accordingly, we would advise that directors address the requirements for renewal of their registrations as soon as possible.
Footnote
1. Administrative fines are levied in Cayman Islands dollars. The figures quoted are in US dollars at an exchange rate of US$1.00=CI$0.82, rounded up to the nearest US dollar.
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.
