Cayman Islands: CIMA Announces Regulatory Changes to Hong Kong Industry Leaders At Ogier Roundtable
Last Updated: 2 October 2006

Global offshore legal and fiduciary services firm Ogier presented Gary Linford, Head of Investments and Securities with the Cayman Islands Monetary Authority (CIMA) to the Hong Kong investment funds industry at a sold out roundtable event, on 11 September, 2006.

The presentation featured a panel of experts from all sides of the industry: Peter Cockhill, partner of Ogier covering the legal issues; Carlyon Knight-Evans, partner of Ernst & Young as the auditor; Stewart Bent, Head of New Business Asia, (Ex-Japan & Korea), Fortis Prime Fund Solutions (Asia) Limited as the administrator; and Philippa Allen, Director of Compliance Asia offering answers from a compliance and due diligence perspective.

In his presentation, Gary Linford announced CIMA’s intention to move toward E-reporting, providing aggregate statistical information that, he says, "will be better in quality and quantity than any other hedge fund jurisdiction". The E-reporting initiative has been designed very carefully so as to increase the efficiency of his team to handle the accounts, while "not increasing the scope of regulation", Linford added.

The system has been designed in such a way that the impact on the funds and the service providers in terms of time and cost are kept to a minimum, but will assist CIMA in its regulation of Cayman’s registered 8,000 funds. "The funds will file their financial statements and a regulatory return through their locally approved audit firms. While we are asking the auditors to file the key data and the PDF of the audited accounts with us, we will stipulate clearly in the regulations and guidance notes that the legal responsibility to provide the information remains with the operator, in keeping with the operators’ other obligations under the Mutual Funds Law", Linford explained.

The interactive format of the Ogier Roundtable enabled Linford to respond to questions on the role of the auditors in filing the reports. He explained further: "We have had preliminary talks with the USA SEC to ensure the filing of data by auditors on behalf of the operators will not be a breach of the SEC independence rules for the auditors. We have received a preliminary ‘in principle’ approval on this initiative from the SEC subject to them seeing the approved legislation and regulation in support of the agreed framework."

The main benefit of this initiative to the industry is the ability to examine the aggregate industry statistics of Cayman’s investment funds, including figures on size, growth, change, market share and investments by and in funds. International regulatory bodies are also interested in these statistics so that they might map macro-economic and global financial flows.

In addition to this announcement, Linford spoke of the overall regulatory philosophy of the Cayman Islands and attributed the balance in our regulatory framework to the success of the jurisdiction. He also outlined some minor changes to the Mutual Funds Law that have been tabled for the legislature, including increasing the minimum subscription to $100,000; the allowance of a foreign-domiciled fund to be administered in the Cayman Islands without CIMA registration; and some other changes, all of which are detailed in his speech, which is available in its entirety on the Ogier website at www.ogier.com.

The second in the Ogier Roundtable series is set for Monday 16 October, 2006 in San Francisco. To register for this complimentary event, please contact Denise Gower.

Ogier is recognised as one of the leading global offshore legal and administration service providers with offices in Cayman, Guernsey, Jersey, and London, and fiduciary and administration offices in Ireland and New Zealand. We have a world-class corporate and international finance practice that attracts top quality work from major investment banks and corporate and finance clients.

"Top Offshore Law Firm of the Year" Alpha Awards, 2006

"Top Offshore Law Firm of the Year" STEP, 2006

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