The Ministry of Financial Services outlined its priorities to the Cayman Islands Chamber of Commerce membership during a breakfast seminar on Wednesday, 18 April 2018, at the Grand Cayman Marriott Beach Resort.
More than 100 Chamber members heard the Minister of Financial Services, the Hon. Tara Rivers, give an overview of the current state of Cayman's financial services industry.
The Ministry's Chief Officer Dr Dax Basdeo then gave a presentation on the specific topics on the Ministry's agenda. Minister Rivers and Dr Basdeo were later joined on a question and answer panel by the Department of Financial Services Policy and Legislation's Director Michelle Bahadur.
A copy of the Minister's speech appears below.
Remarks by the Minister of Financial Services, the Hon. Tara Rivers, JP, MLA
Chamber of Commerce Breakfast
8:45am Wednesday, 18 April 2018 | Grand Cayman Marriott Beach Resort
Good morning and thank you for hosting and organising this breakfast briefing on financial services. The fact that financial services is an integral part of the Cayman Islands economy, and therefore an integral part of local commerce, is certainly not lost on this audience. I'm happy to be here to apprise you of recent developments in this area.
During my opening remarks today, I'll speak more generally, as the Ministry's Chief Officer will speak in more detail on certain aspects during his presentation. Nonetheless, after his presentation and during the Question & Answer session, I will aim to provide additional context or information as appropriate. That said, I want to underscore that the Government and the Ministry are more than willing to engage with the Chamber on matters of mutual interest.
Our top headline for today is that financial services continues to maintain its historic position as the driver of Cayman's economy. We continue to account for more than 50% of our GDP, as well as approximately 15% of overall employment. Direct fees from the financial services sector account for roughly 40% of Government revenue. From a comparative perspective, according to the recent Global Financial Services Index, out of 110 countries, Cayman is among the top 25 best financial centres of the world. In addition, for the ninth consecutive year the Cayman Islands has been named the world's number one specialised financial centre in The Banker magazine's 2017 survey.
We maintained this position despite 2017 being a challenging year for countries with financial services industries generally, and for Cayman it was no exception. In fact, during the past year or so we had assessors from the OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes and the Caribbean Financial Action Task Force; and we underwent the EU's screening process to identify jurisdictions that it considered to be non-compliant in tax cooperation. While again, Dr. Basdeo will elaborate on these in his presentation, I must point out that Government's proactive as well as reactive response to these initiatives can be measured in the more than 40 pieces of financial services related legislation that went before the Legislative Assembly in 2017, in addition to the numerous face-to-face and written engagements which took place throughout the year.
And for this, the Government is very appreciative of everyone, in both the public and the private sectors, for their great effort in assisting us to develop appropriate enhancements to our legislation and our practices. Appropriate partnership with industry is part of the foundation to being a successful international financial centre, to the benefit of all stakeholders.
So, we are just at the beginning of Q2 of 2018 and as expected, this year has been no less challenging as Cayman continues to implement recent legislative changes, anticipate and develop further legislative changes that may be necessary in during the course of the year, and continues to increase our international engagement efforts going forward. In anticipation of this activity, the 2018 and 2019 budget increases for the Ministry approved late last year amount to roughly CI$2m to the financial services departments, CI$2.5m to CIMA, and CI$780k to industry associations, per annum. This is a significant increase in investment across the board; and, as Minister, I will continue to fight for further increases as and when necessary and justifiable to continue to support the work of the Ministry, CIMA and industry alike.
Given that you all are here because you have a (vested or other) interest in financial services, I don't really anticipate any objections as to the increase in Government budget to support the industry, particularly in light of industry's recent continued advocacy for more money for financial services. But just for the record, the overarching objective of this Government is to ensure that our jurisdiction continues to thrive and attract all the sound business we can attract, in as many lines of financial services business as it makes sense for us to pursue. Of course, in doing so, our reputation as being commercially innovative and adaptable, yet a suitably regulated jurisdiction which adheres to global standards will be key – hence our increased engagement in the UK, Europe, US and Asia to debunk myths and to educate key audiences. Ultimately, the evidence of our success will not only be the reinforced strength of our industry, but the strength of economies and societies globally, as well as our own.
Together, we must develop the fact based, data driven message points to help tell the reality of the value-addedness that, as a jurisdiction, we bring to the global and onshore domestic economies; and we must each – through our own spheres of influence – not shy away from telling our story in a convincing and compelling manner. In fact, industry and Government must become even more proactive in doing so! Because to do otherwise, we run the risk of others defining our reality for us – and I don't think I need to elaborate on the dangers that that brings. Our biggest challenge right now as a preeminent IFC is not about regulatory compliance; it's a perception problem. A perception problem which, as an industry, we have allowed to linger and (in some cases) fester, because those of us who know better either have not taken the time or (quite frankly) couldn't be bothered to address the misconceptions and misrepresentations often perpetuated by popular media and otherwise. We have a great story to tell; and we all – collectively – must do more to tell it.
I look forward to working with the CI Chamber of Commerce, as a stakeholder, as the Cayman Islands continues its advocacy, leadership, cooperation and innovation, in order to maintain and enhance our status as a leading IFC. Thank you.
Minister of Financial Services, the Hon. Tara Rivers, addresses the Chamber membership alongside Ministry Chief Officer Dr Dax Basdeo.
Minister of Financial Services, the Hon. Tara Rivers, addresses the Chamber membership. From left, Ministry Chief Officer Dr Dax Basdeo, CI Chamber of Commerce President Paul Byles, Minister Rivers, Department of Financial Services Policy and Legislation Director Michelle Bahadur, and Chamber CEO Wil Pineau.
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