Archive for November, 2012

Cayman Legislative Assembly passes Fiscal Responsibility Law

Tuesday, November 27th, 2012

The Cayman Islands Legislative Assembly has passed the amendments to the Cayman Islands Public Management and Finance Law (PMFL) that incorporate a UK-drafted fiscal framework.

The approved version was the 3rd to go before the assembly. It incorporates the agreed Framework for Fiscal Responsibility (FFR) into the Cayman finance law.

The FFR states that the Cayman Islands government’s fiscal strategy consists of the five components:
controlling government expenditure;
limiting new borrowings;
re-aligning the revenue base;
improving the performance of Statutory Authorities and Government Companies;
reducing costs by working in partnership with the private sector.

In August, the government of the United Kingdom endorsed the revised Cayman budget for 2012/2013 but restricted the size of a 2nd overdraft facility to limit Cayman borrowing.

The budget was the result of a 2nd revision of budget proposals from the Cayman government, which was instructed to rewrite its initial budget plans earlier this year after the UK government blocked the territory from increasing borrowing to service the islands’ recurring budget deficits. A second draft was promptly abandoned after an outcry from the local financial industry regarding a proposal to introduce a direct tax on expatriate workers’ income.

The overdraft facilities, with a combined value of USD 81 million, are being provided in recognition of the cyclical nature of Cayman revenues from the financial services industry. At the request of the UK’s Foreign and Commonwealth Office, the Cayman Islands will be required to establish a ‘Budget Delivery Board’ to ensure that it achieves a budgetary surplus, as well as the repayment of the two credit facilities to the UK government by January 31, 2013, and June 30, 2013.

Offshore Mergers and Acquisitions Market grows, Cayman’s best in deal volume and value

Thursday, November 15th, 2012

According to a recent report, the offshore mergers and acquisitions market has shown a healthy 11% year-on-year growth in the cumulative value of transactions in Quarter 3 in 2012. This report was issued by offshore legal, fiduciary and administration services provider Appleby. While volumes in the same period show a 16% year-on-year decline, it was noted that average deal values in Quarter 3 which stood at USD 78 millio are strong compared to 2011 levels.

Some of the key moments for Quarter 3 2012 is that the Cayman Islands continues to hold top spot both in terms of volume and deal value with 86 deals worth a combined value of USD 9.1 billion.

Appleby Group Chairman Peter Bubenzer said: “The uncertainty in the eurozone, which we hoped might reach some kind of resolution back in Quarter 1, remains far from entering an end game, while the close race for the White House will, we suspect, have a profound effect on US transactions through to year end.”