The Cayman Model goes from strength to strength
Q&A with Jude Scott, Cayman Finance
What is the most important aspect of maintaining Cayman’s reputation as the world’s leading offshore IFC?
The key element that ties together all of our efforts to operate a premier global financial hub for alternative investment funds and a culture of compliance with our laws, regulations and global standards is the world class, legal public accounting, administration fiduciary and asset management professionals that make up the Cayman Islands financial services industry. Our approach as an industry – what we call The Cayman Model -- puts extraordinary value on our business culture and the women and men who maintain it.
Cayman is home to the world’s top professionals in areas such as corporate and director services, legal services, public accounting, banking, wealth and asset management, insurance, reinsurance and capital markets. They are vital to the success of our industry and our culture of compliance. Cayman has been ranked as the Top Specialized Financial Center by The Banker for nine years in a row. We have also been voted Best Hedge Fund Services Jurisdiction and top Offshore Captive Domicile. That professional excellence is at the core of our reputation as a leading International Financial Centre.
What difference is Cayman Finance trying to make, in terms of how the jurisdiction is perceived internationally, by managers, investors as well as regulators?
Our international engagement is centred around clearly telling the story of The Cayman Model. The Cayman Model unites outstanding individual jurisdictional leadership with the highest levels of multilateral cooperation. We want to ensure fund managers and investors around the world understand that Cayman Islands has an incredibly diverse financial services industry, which enhances our ability to draw in a wide range of investment as well as talented professionals and maintain an exceptional world-class business culture. For regulators, The Cayman Model demonstrates our commitment to meeting global standards for transparency and cross-border cooperation with tax and law enforcement authorities.
How would you assess 2018, in terms of the initiatives you worked on? Were there any particular highlights that stand out?
Last year was an exciting time for Cayman Finance as among our many initiatives we made progress on developing a concept known as a Certified Digital AML ID. A regulated Certified Digital AML ID platform ultimately could be used to validate the identity of investors and funds wishing to participate in areas underpinned by technology such as Blockchain and others. It will offer significant potential efficiency, cost-savings and compliance benefits for the funds industry to expand its use of Fintech tools by creating a single point of entry for investors and funds to a secure, closed system. This Certified Digital AML ID will allow the tokenisation of funds and trading in secondary markets while being fully AML compliant. We’re excited to continue developing this concept in 2019.
What approach do you take to developing and shaping dialogue with Cayman industry practitioners and CIMA, to present a united front to the global funds industry?
Cayman Finance is comprised of member firms representing our jurisdiction’s foremost legal, public accounting, banking, insurance, investment funds, administration, trusts and corporate services companies among many others. Additionally, we represent 15 industry associations and take a very collaborative approach on developing and coordinating industry-wide responses on legislative and regulatory consultations through working groups on subjects like Anti-Money Laundering. The Cayman Ministry of Financial Services and Cayman Islands Monetary Authority also are very accessible and receptive to input from the industry coordinated through Cayman Finance and we work collaboratively to develop innovative and effectively regulated new financial services products and services to anticipate and meet market demand.
What will Cayman Finance be focusing on in 2019? Are there new markets you will be looking to raise Cayman’s profile in?
In 2019, Cayman Finance will continue to focus on mature markets like the United States. We are also very actively engaged in promoting our role as an extender of value for the UK as it manages the Brexit process. We also recognise that substantial opportunities exist in maturing markets in Asia and Latin America. We plan to build on enhanced engagement initiatives in China that began in 2018 and will include working toward close partnership with industry associations in Hong Kong and mainland China. Finally, we expect to increase our outreach in Latin America, and especially Brazil, where Cayman funds have already played a key development role through the World Bank’s International Finance Corporation.
Finally, overall, how would you assess the health of Cayman’s funds industry? Especially given the fact that it has just recorded its highest ever number of registered companies, growing 7 per cent year-on-year.
The Cayman funds industry is very strong. Global investors are increasingly engaged in a flight to quality – relocating their resources based on sophisticated assessments of which financial centres offer the best combination of:
• a global network and diverse industry;
• a neutral legal and tax environment;
• high regulatory standards and respect for privacy;
• world class professionals and credibility.
Very few international financial centres meet those qualifications – and none do it as well as the Cayman Islands. In fact, we refer to it as the Cayman Model and it is driven and supported by the quality of professionals physically within the jurisdiction and a strong balanced legislative and regulatory framework. n