It is not surprising that the Cayman Islands Law Society and the Chamber of Commerce have both made public their opposition to the United Kingdom’s proposals to make public the list of individuals or companies that benefit from registered financial entities in its territories that include the Cayman Islands.

Last year, UK’s Prime Minister David Cameron, said it was his intention to publicise such a list in Great Britain. However, Mark Simmonds, Parliamentary Under Secretary of State at the Foreign & Commonwealth Office and responsible for the Overseas Territories, said it would be up to them to make their own decision whether to follow suit.

As a result the Cayman Islands government asked for public comments upon the beneficial ownership proposal to be submitted to them so they could relay that information back to the UK. The deadline for the receipt of the comments was last Friday (Feb 28).

At present here, the only way anyone can obtain accessibility to the registry of beneficial ownership is through the Cayman Courts, and that is likely to take a long time and become extremely expensive.

However, if the UK proposal is adopted the list of beneficial ownership – those persons profiting from any financial entity in the Cayman Islands – would be there for anyone to view.

The Cayman Islands is known and has capitalised financially on its secrecy that has suddenly been eroded from agreements like FACTA that have been forced upon them. Therefore I expected there would be protests coming from every direction to any more requests for information. If you don’t have to give it, we won’t give it!

I didn’t need a crystal ball to help me prophesy what the reaction would be.

No. No.

Chamber of Commerce President, Johann Moxam, wrote in a letter to government’s Financial Services Minister Wayne Panton, “We should not infringe on legitimate privacy by embarking on an untested and unchartered path which is inconsistent with any global standard and which certainly does not exist in competing jurisdictions.”

“It is disturbing and regrettable that Cayman is being put under political pressure by competing jurisdictions and political leaders to go one step further than everyone else, which draws the inference that we are doing something wrong and should be the only ones to make such a change,” Moxam added.

Alasdair Robertson, Maples and Calder Partner and President of the Cayman Islands Law Society weighed in with something similar:

“In order to work properly and achieve any semblance of its objective, such a proposal for a publicly accessible register of beneficial ownership would need to be universally applied by all jurisdictions.”

He said Cayman was already compliant with international tax and financial information reporting standards. Cayman’s finance-related businesses are already required to obtain beneficial ownership data under the territory’s anti-money laundering laws, and “many objectives of Mr. Cameron’s beneficial ownership proposal and earlier initiatives from the U.K.-based Organisation for Economic Co-Operation and Development are the same”.

Robertson also said such a register, even if it was implemented for all countries on Earth, could have grave impacts on the financial services industry.

He added, “The proposal for a publicly accessible register will ultimately undermine competition and innovation, and will likely have disastrous consequences on global capital markets and the ability to secure financing. Moreover, there would be cost implications for setting up and maintaining such a public reporting system disproportionate to the perceived benefit.

“Those proposing the beneficial ownership reporting plan might not comprehend how financing and investment occurs in modern markets. Most investment funds are operating through a nominee, representing a number of owners who change rapidly. The complexities presented by such structures would inevitably lead to non-compliance.”

He also said the need to “synchronize reporting efforts across the globe would be daunting, at best. In essence, each public registry system will need to be able to ‘talk’ continuously with the systems in every other jurisdiction, otherwise the system and its objective fails.”

Now try and argue against that!!