July 16, 2020

Cayman Islands – recognition and awards


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cayman-beach2-DW-Vermischtes-QuedlinburgFrom Solomon Harris, Cayman Islands Attorneys-at-Law

With the recent praise for the Islands’ “robust and transparent” legal and regulatory regime in the Organisation for Economic Co-operation and Development’s (OECD’s) latest Global Forum Peer Review report, it is worth remembering the reasons behind the Islands’ success as a financial centre.

Global Peer Review Report

The report commends Cayman’s financial industry for its clear and efficient system for releasing information and noted the quality of its cooperation and speedy responses to exchange of information requests.  As well as having agreed to sign the Model 1 FATCA agreement with the USA, the jurisdiction now has 31 tax information exchange agreements (one is a double tax treaty) and the recent penalties increase in the 2012 and 2013 Companies, Partnership and Exempted Limited Partnership Amendment laws have followed recommendations of Cayman’s Phase 1 Peer Review in 2010.  On 15 April, the Global Forum published Cayman’s Phase 2 Peer Review report, which states that the increased penalties now appear to be ‘dissuasive enough to ensure compliance’ with obligations to maintain ownership and identity information.

Hedge Funds

The Islands are home to 40% of the world’s hedge funds, and 85% of offshore hedge funds. As most hedge fund industry professionals are aware, the Cayman Islands are by far the number one jurisdiction for the establishment and registration of hedge funds with around 10,000 registered with the Island’s financial services regulator, the Cayman Islands Monetary Authority (“CIMA”).


In addition to the agreements above, Cayman adheres to the Basel Core Principles for effective Banking Supervision, the IAIS principles for insurance regulation, the IOSCO principles for regulation of investments business, the FATF Forty Recommendations on anti- money laundering and best practices in the area of trust and corporate services regulation.  In a further step towards compliance with the requirements of the European Union’s Alternative Investment Fund Managers Directive, in March 2013 the Islands’ government passed an amendment that allows CIMA to enter into cooperation agreements with EU regulators.  (It already has an agreement with the UK regulatory authority).  These will take the form of the European Securities Markets Authority’s model form Memorandum of Understanding.

Captive Insurance

The Cayman Islands has been granted top billing of “Offshore Domicile of the Year” at the 2012 Captive Live conference in Chicago.  As part of the Islands’ continuing innovation, its Legislative Assembly passed the Insurance (Amendment) Bill 2013 to allow the registration of portfolio insurance companies, or PICs, within segregated portfolio company insurers (SPCs), creating a framework for incorporated cell companies in the insurance sector.  CIMA serves on the Offshore Group of Insurance Supervisors.

The Banker Magazine Survey

CIMA also serves on the committee of the Offshore Group of Banking Supervisors.  As a leader in banking, mutual funds, captive insurance and special purpose financing, it is no surprise that the Cayman Islands has been voted the world’s top “specialised finance centre” in The Banker magazine’s 2012 survey of international financial centres – a title it has held for the last four years running.

Other benefits

If the sun, sand, sea and snorkelling were not reasons enough to consider a personal move to the Cayman Islands, then at least your fund can enjoy the benefits of this award-winning financial centre.

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