Legislation expected to come before Cayman Islands lawmakers later this year would remove a fee charged to specific types of fund administrators who do not live in the islands.
Proposed amendments to the Mutual Funds Law seek to delete the term “non-resident mutual fund administrator” from the current legislation. Those administrators are required to file an annual declaration with the Cayman Islands Monetary Authority.
The current law also requires the non-resident fund administrators to pay a fee to the monetary authority before Jan. 31 of each year.
“It has been found that the collection of this fee is not feasible in the Cayman Islands,” the memorandum of objects and reasons attached to the bill states.
The government restructured its overall licensing regime for fund directors in the local financial services industry with the passage of the Directors Registration and Licensing Bill earlier this year.
The law requires that directors of funds and investment companies either be registered or licensed.
It applies to resident and non-resident registered, professional and corporate directors of covered entities.
Professional directors, defined as anyone who is appointed as a director for 20 or more entities, will need to be licensed unless they are working for a company that holds a company management or fund administrator license.
The exception also applies to directors working for fund managers regulated by the monetary authority or specified overseas regulators, as long as the directorship appointment relates to the fund manager.
All other directors and those falling under the licensing exception need to apply to be registered under the new law.
The monetary authority can refuse to register a director if the applicant has been convicted of a criminal offense involving fraud or dishonesty or is subject of an adverse finding, penalty, sanction or disciplinary action by a regulator, self-regulatory organization or professional disciplinary body.
Professional directors must also meet the fit and proper test similar to the one set out in the Mutual Funds Law, including honesty, integrity and reputation, competence and capability, and financial soundness.