Cayman Islands: POLICY UPDATE: From the Minister of Financial Services, Commerce & Environment, Hon. Wayne Panton

Last Updated: 28 February 2017
Article by Hon. Wayne Panton

Since 2013, the government has made real progress with our plans to enhance the Cayman Islands' success. We are understandably proud of this fact, and just as proud that we've accomplished these goals in partnership with industry and in particular, the members of Cayman Finance.

Indeed, during this administration my ministry has worked on nearly 50 pieces of primary and secondary financial services legislation, all of which have been passed by the Cayman Islands Legislative Assembly or approved in Cabinet. That's pretty remarkable and efficient for a Ministry of our small size, and I think we've broken records in terms of both volume and significance.

And to put our work into broader context, within the next few months my ministry will have substantially completed all of the legislation on the list that our country's public/private Financial Services Legislative Committee has been proposing for many years as essential to our jurisdiction's continued success. No doubt we have been moving quickly, but we have no intention of slowing down. With key events on the horizon, including assessments by international bodies, my Ministry of Financial Services remains extremely active because we are determined to continue not just getting things done, but getting things done well.

To quickly touch on some of our key legislative achievements to date, Cayman's Limited Liabilities Companies Law was launched in June and has received a great welcome from industry, with registrations exceeding expectations. Th e popular revamping of the Exempted Limited Partnerships Law and long-awaited legislation relating to the Cape Town Convention are also now in force.

And there's more to come, because we are committed to doing what Cayman does very well: creating innovative, market-leading legislation, and engaging globally on regulatory matters. With this in mind the agenda for the October 2016 sitting of the Legislative Assembly was ambitious. Bills relating to the Auditors Oversight Authority; Companies Management; Trust Law; Monetary Authority;

Nonprofit Organisations; and intellectual property rights, including trademarks, patents and design rights, were passed.

Despite all this activity, my ministry is not slowing down. In fact for the first 2017 Legislative Assembly sitting, amendments relating to a central platform for beneficial ownership information, as well as foundations, should be heard. While all of these bills are important to further enhance our reputation, prepare for international assessments, or for market products and services, another key piece is the Legal Practitioners Bill (LPB), 2016.

This bill has taken the better part of 15 years, if not more, to accomplish and I thank and congratulate both the Caymanian Bar Association as well as the Cayman Islands Law Society for their stellar efforts in bringing it closer to passage than ever before. The LPB would modernise legislation in order to regulate, on a worldwide basis and in line with international standards, practitioners of Cayman Islands law.

In so doing it would protect and enhance the reputation of the Cayman Islands as a centre of excellence with respect to the provision of legal services. Once passed into law, it will position us well for the Caribbean Financial Action Task Force assessment in 2017, as legislation governing legal professionals is included in its scope.

In addition to our legislative accomplishments, we've been more successful than ever with our global engagement initiatives because we have been wisely and diplomatically bold in our positions and in our contributions to the international dialogue. Cayman has been saying for years that we are among the vanguard of international financial centres. Particularly given the way that this government has continued to enhance our regulatory framework, we have stood shoulder to shoulder and in some cases eye to eye, with influencers, detractors and rainmakers.

In April 2016, I travelled to Brussels with two ministry colleagues to address the European Parliament about our tax regime, answering questions in a room of about 60 lawmakers. The following month the Hon. Premier and I, accompanied by colleagues from his office, my ministry and the Cabinet Office, were in London for the UK's Anti-Corruption Summit. There the Premier made a short, to the point, two-minute statement about substantive issues in global transparency that was potent enough to expand the dialogue beyond Overseas Territories, to include countries that had largely escaped broader public examination. His diplomatically delivered speech was supported by interviews given to UK media by government and Cayman Finance highlighting Cayman's adoption of the highest standards of transparency, international cooperation and exchange of tax information.

We were able to stand firm during the UK Summit precisely because Cayman has carefully and successfully navigated the sometimes churning waters on issues as nuanced as beneficial ownership. In fact, following last year's Joint Ministerial Council, our discussions with the UK deepened and in April this year, we enhanced the exchange of beneficial ownership information with the UK for law enforcement purposes, through the Exchange of Notes. The Exchange of Notes became the basis for the Hon. Premier's announcement at the UK's Summit of our own initiative of entering into similar agreements with other countries. Although we have had no requests, our good-faith and credible off er remains on the table.

So in these past three years, we have taken care of business by getting things done. We've done it in accordance with good governance and through effective, respectful collaboration with industry.

In fact, a key issue that industry raised with government shortly after it took office concerned funding for financial services. At the time I cautioned that government had a lot to do during the first three years, and that our expectation was therefore for slowly improving incremental changes. Yet Government has exceeded even our own expectations in getting our finances back under control and as a result, we have now exceeded my initial projections on our ability to improve support to our regulator, the Cayman Islands Monetary Authority (CIMA); and to industry.

We increased funding for CIMA by more than $3 million in this current budget. Similarly we have significantly increased funding for Cayman Finance for stronger collaboration on the jurisdictional marketing plan. And outside of that, we signed on as the sole lead sponsor for a local industry conference that's taking place in 2017.

We've also increased financial services staffing in the ministry. This will go a long way to help us to continue our responsiveness in local and international matters.

I mentioned earlier that we were able to increase financial services funding because Cayman's economy has steadily grown stronger. The metrics tell the story of significant improvements. Growth has accelerated to 2.8% so far this year, and is projected to end the year at 3% overall GDP growth. Expenses remain under control, and we have growing reserves for minimums required for operating expenditure.

Importantly, unemployment continues its downward trajectory – as of press time, the rate had fallen to 5.6% for Caymanians and 3.9% overall. Furthermore, both the cost of living and the cost of doing business are continuing their downward trends from last year as well. These figures prove that government's strategy for improving the Cayman Islands economy is working.

Our fiscal position is healthy, and we are well positioned for business. As Minister, I am honoured to work alongside persons in my Ministry, CIMA, and industry who are fully committed to ensuring that Cayman continues to be compliant with global regulatory standards, while maintaining and growing our commercial success.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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