The Cayman Islands is the leading offshore domicile for hedge funds, and as regulators and investors have placed more stringent requirements on good governance and oversight, independent directors have taken up the mantle of supporting the asset management industry.
In 2014, the Cayman Islands Monetary Authority (CIMA) introduced its directors’ registration law, which was followed up in 2017 by the administrative fines regime, which provides the regulator with guidelines on how to impose penalties on funds and their operators for non-compliance. Penalties can range from CI$5,000 to CI$1,000,000 depending on the severity and scope of the breach.
Most new hedge funds have at least a majority of independent directors on their boards, many of whom are seasoned professionals based in Cayman. A few well known firms of independent directors based in Grand Cayman include the Carne Group, HighWater and ICG Management Limited and law firms, such as the Maples Group and Ogier.
Cayman had come under pressure from institutional investors and overseas regulators (such as the International Organisation of Securities Commissions (IOSCO)) to enhance its regulatory regime in relation to governance and anti-money laundering monitoring. By taking these steps Cayman stays competitive with Dublin and Luxembourg, as it seeks to strike a balance between being sufficiently regulated, without the regulations being overly burdensome, and therefore keeping Cayman attractive to new investors.
For a list of the top firms in the Cayman Islands who offer independent director services please see here: