Independent Directors

A growing sector of Cayman’s financial services industry is the provision of independent directors. During the global financial crisis it became apparent that independent directors from the Cayman Islands were indispensable when hedge funds were faced with making difficult decisions. In particular, they ensured that all decisions were made in accordance with the fund documents and that all shareholders were treated fairly. This has not been lost on the institutional investors who are, for the most part, making it one of their investment requirements that there is an independent board of directors. It has now become common place that all new hedge funds have at least a majority of independent directors on their boards. On 4th June 2014, the Cayman Islands Government approved the Directors Registration and Licensing Law (DRLL) 2014, which required all directors of mutual funds regulated under the Mutual Funds Law (2015 Revision) and directors of companies registered as excluded persons under the Securities Investment Business Law (2015 Revision), to register with CIMA.

These Laws provide for the registration and licensing of individuals or companies appointed as directors of Cayman Islands mutual funds and entities carrying out securities investment business, which would include Cayman Islands incorporated or registered investment managers. The Law requires an individual acting as a director on 20 or more entities to apply for a professional director’s licence unless they meet certain caveats. Professional directors are required to have insurance with a minimum aggregate cover of $1m and minimum cover of $1m for each and every claim. An amendment to the DRLL was passed earlier this year as a consequence of amendments to the Securities Investment Business Law (SIBL).

For a list of the top firms in the Cayman Islands who offer independent director services please see here: