Cayman Islands Financial Services

The parent organization of the Cayman Islands shipping registry, Cayman Maritime, has announced 2010 as a successful year for the maritime industry in Cayman.

According to Cayman Maritime, despite economic difficulties globally, over the past year, there has been noticeable interest in the jurisdiction in terms of vessel registration.

It was reported that 2010 was one of the best years experienced by the Register, in terms of both the total number of vessels registered and the combined gross registered tonnage.

At the end of 2010, a total of 1 870 vessels were listed on the Register, which is an increase as compared with 1 815 in 2009. There was also an increase in gross registered tonnage from 3.7 million in 2009 to 3.9 million at the end of 2010.

As regards new vessel registrations, it was up some 254 in 2010, which was the 2nd best year ever.

Although the Irish fund industry announced doubling their registered funds to 7.4%, this statistics cannot be compared with the Cayman fund industry, which, according to the Cayman Islands Monetary Authority (CIMA), goes on growing by approximately 95 funds per month.

The CIMA has reported a natural attrition rate of de-registrations of approximately 5%. This has been a typical rate over the past several years, which signifies stability in the fund industry of the Cayman Islands.

Redomiciling funds from Cayman to Malta has been discussed previously. However, this is not popular trend as the CIMA has confirmed that only 4 funds have cited re-domicilation to the EU – 2 of them to Malta and 2 funds to Luxembourg.

Cayman Finance Chairman Anthony Travers stated: “If we sent out a press release each time a Cayman fund was launched, the international media would be flooded with two such announcements each day. A doubling of registered funds to 7.4% does not constitute news. What astounds me is how these insignificant claims get column inches.”

According to a recent study carried out by International Fund Investment, 60% of investors are against more regulation because adds to increased costs with no other discernable benefits. The study also revealed that only 18% of fund managers are even considering moving funds to the European Union.

Simon Osborn of International Fund Investment said: “For the institutional investors and managers the well-understood path of the Cayman fund – non-bureaucratic, quick set up times, high quality service providers and its solid reputation is preferred Cayman is well-known and that familiarity breeds trust”.

Travers stated: “Comparing the information of the Cayman Islands Monetary Authority and the International Fund Investment report supports what the Cayman service providers are seeing”. He added that investors are not looking for increased regulation, but for returns and “the emphasis is now on stress-tested products such as Cayman’s and effective due diligence to best protect their investments”.

The Cayman Islands is intending to relax visa requirements for Jamaicans travelling to the British territory in January 2011.

On December 17, this announcement was made by Premier McKeeva Bush at the inaugural Northern Caribbean Conference on Economic Co-operation, hosted by Jamaica National Building Society (JNBS).

Visa exemptions may be applied by Jamaican Nationals who hold validated US, UK or Canadian visas.

Complaints Commissioner of the Cayman Islands, Nicola Williams, is currently visiting the Office of the Ombudsman in Gibraltar in order to acquaint herself with the working of an ombudsman of similar jurisdiction and level as her own.

During her short stay, Williams will have meetings with the Minister for Social Services and the Mayor. Also, she will have a Tour of the Rock.

Before her appointment, Ms Williams was 1 of 15 commissioners with the UK’s Independent Police Complaints Commission. She was in charge with investigating, mediating and resolving complaints about police misconduct. Also, she has 16 years of experience as a barrister in private practice and is also a Fellow of the RSA (Royal Society for the encouragement of Arts, Manufactures and Commerce, an organisation for social progress) and a former BBC Regional Advisory Committee chair.

It is worth mentioning that the Office of the Complaints Commissioner of the Cayman Islands was established in July 2004 with a view to encourage government departments and agencies to better serve the public. This independent Office answers only to the Legislative Assembly as a whole through the Speaker. The Complaints Commissioner is an Ombudsman.

On November 15, Walkers, the leading international financial centre law firm, welcomed the confirmation of the final terms of the Alternative Investment Fund Managers Directive (AIFMD) and the removal of uncertainty for non-EU fund managers marketing non-EU funds in the EU as a positive development for the investment funds industry in the Cayman Islands, as well as in the BVI and Jersey.

On November 11, 2010, the final terms of the AIFMD were approved by the European Parliament.

Rod Palmer, partner and Global Head of Investment Funds with Walkers, said: “The confirmation that non-EU fund managers will be able to continue marketing Cayman Islands, BVI and Jersey funds to professional European investors is excellent news for the industry”.

Richard May, partner with Walkers based in the British Virgin Islands, said that the Cayman Islands, as well as the BVI and Jersey, are very highly rated by the FATF in respect to their anti-money laundering regimes. This means they will not have to make any changes in their funds’ operations to comply with the Directive.

According to Jennifer Thomson, partner with Walkers in the Cayman Islands, in recent discussions on the Directive, the Cayman Islands Monetary Authority (CIMA) confirmed their commitment to entering into co-operation agreements with EU regulators as a matter of priority. He said: “This follows Cayman’s long history of working with regulators worldwide and reflects Cayman’s own strong regulatory framework. We know Jersey and BVI regulators share this commitment as well.”

The Cayman Islands appears on the OECD’s “white list” of nations which have substantially implemented the internationally agreed standards on tax and information exchange. The jurisdiction continues to enter into new tax information exchange agreements (TIEAs) with EU member states.

Research and Markets has announced the addition of the report titled “Offshore Financial Services in Cayman Islands, 2005-2009 (Databook)” to their offering.

The databook highlights key data on the offshore financial services market in the jurisdiction. The data provided in this report includes total deposits, total mutual fund investment and their market segmentation. All the data provided in Offshore Financial Services in Cayman Islands are historical and regards 2005-2009.

When reviewing total deposits, the report provides a comparison of offshore and onshore, and retail and institutional customers. When reviewing total mutual funds, it offers a comparison of offshore and onshore, and retail and institutional customers.

The report shows that, over the 2005-2009 period, deposit balances in Cayman increased at a CAGR of 15.2%. Also, over this period, mutual fund balances increased at a CAGR of 18.1%.

The report is useful for understanding how the offshore financial services market in the offshore jurisdiction has developed over the period, to get to know about the size of the deposits and mutual funds as well as to be able to make adequate business decisions through an understanding of the overall trends within the Cayman market.

Following a public competition (RFP), Ignition (Cayman) Ltd. has been awarded a contract by the Government of the Cayman Islands. In accordance with the contract, the firm will digitize and index over 1 million documents for the Lands & Survey Department of the Cayman Islands Government.

The project is to be completed within 8 months. It includes processing documents in varied sizes, most of which are in color. Digitized and indexed documents will be uploaded to the government’s Oracle based ECM (Enterprise Content Mgmt) System.

Ignition has offices in Grand Cayman as well as in Bermuda, Atlanta and Halifax.

On October 22, Ireland’s Prime Minister Mr. Cowen announced that he was “declaring war” on the Cayman Islands.

He said that Ireland’s economy should be re-invigorated. He also said that Ireland has “an under-utilised military which could easily take out the Caymans and clean out its banks, thereby providing us with much-needed cash”.

He said that when this idea occurred to him, he checked it out on Wikipedia to find out that the Cayman Islands has no regular military forces.

Mr. Cowen noted that, depending on the success of the Caymans venture, declaring war on Saudi Arabia “to get cash and oil” could be considered.

Scotiabank has completed a transaction aimed to acquire the wealth management business of BNP Paribas in the Cayman Islands as well as in Panama after receiving all regulatory and other approvals.

In the beginning of August, the acquisition of a portion of the wealth management business of BNP Paribas in the Bahamas was completed by Scotiabank.

It should be noted that the deals are not financially material to Scotiabank and terms of the above-mentioned transactions were not disclosed.

According to Chris Hodgson, group head, global wealth management, Scotiabank, “The transaction enhances Scotiabank’s existing operations in the Caribbean and Central American regions, strengthening our ability to serve the needs of our clients.”

Scotiabank has offered personal and commercial financial services in the Cayman Islands since 1968.

According to the Z/Yen biannual qualitative survey, the Global Financial Centres Index 8 (GFCI 8), the Cayman Islands is one of top offshore financial centres. Globally, it takes the 34th position.

As compared with the 2009 survey, this position is a decline for the jurisdiction. The Cayman Islands was down 23 points and 6 places to 34th, which, to some extent, can be attributed to the increased regulatory pressure that offshore.