Archive for June, 2010

DoT closes US regional offices to save cash

Cayman News | 17/06/2010 | 8 Comments

(CNS): The Department of Tourism has said it has saved over $1 million by closing three regional offices in the United States. In what it describes as a restructuring of its US operations designed to “increase the efficiency and effectiveness” of the Cayman Islands tourism investment in the US market, the offices in Miami, Houston and Chicago will be closed and 12 staff made redundant. It said the national office in New York will coordinate the US operations with five home based marketing representatives who will cover the country. The change comes following a review of Cayman’s marketing structure in the States which has not changed for ten years.

The decision to restructure came about following a strategic review of the department’s effectiveness and ability to deliver on its mandate to increase visitors to the Islands, said Shomari Scott, Ag. Director of Tourism. "The world has changed significantly, especially in recent times, yet the organisational structure in the US has remained static for almost a decade," he said.

“In today’s world, with today’s economic challenges, the Department needs a more flexible and robust structure that will allow for the best return on investment of funds spent. This is particularly important in the current environment where internet, mobile and social media are key drivers for information sharing, decision making and ultimately influencing consumer behaviour."

Dot said the new streamlined framework will enable government entity to target the travel trade as well as consumers. "The new structure is leaner and more focused on the modern needs of the international market and local industry and we expect the modified organisation will enhance the effectiveness of our integrated marketing efforts, which utilize TV, interactive media, print, public relations and promotions," Scott explained.

"The Cayman Islands is up against fierce competition from other Caribbean destinations," he said, "and Jamaica, Bahamas and Aruba have all restructured their USA based sales/marketing forces a few years back. In order to maintain and grow our market share we too must have the ability to dynamically respond to ever changing market forces."

Osborne plans to scrap UK’s financial regulator

Cayman News | 17/06/2010 | 0 Comments

(Bloomberg): The UK’s Chancellor of the Exchequer George Osborne had said he will abolish the Financial Services Authority and give most of its power to the Bank of England, undoing the regulatory system set up by Gordon Brown in 1997. In the most sweeping changes to financial regulation since then, the watchdog will be wound down and replaced by three bodies over the next two years, the chancellor said. A Prudential Regulatory Authority will be created as a subsidiary of the central bank. Osborne says he will also set up a Financial Policy Committee at the bank and establish a consumer protection and markets agency.

Osborne, whose Conservative Party took power after the May 6 election, is delivering on a promise made almost a year ago to shake up the way the U.K.’s banks and markets are policed. He’s blamed the system established by former Labour Prime Minister Brown for failing to prevent a financial crisis that saddled taxpayers with liabilities of as much as 1.4 trillion pounds ($2.1 trillion) and plunged the economy into the worst recession since World War II.

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Plan depends on cuts

Cayman News | 17/06/2010 | 12 Comments

(CNS): According to the Cayman Islands government, its financial recovery will depend on a combination of improvements in external influences and major cuts on internal ones. The three-year plan that government submitted to the UK reveals that the country’s earnings won’t reach the levels it had predicted to collect in the 2009/10 (last October) until the 2012/13 fiscal year. However, government aims to cut government spending. In this long term national financial plan it says public expenditure will continue to fall from the predicted highs of almost $532 million for core government in 2009 to just over $462 million by 2013 — eliminating the country’s deficit.

Government says it aims to do this through pro-growth policies combined with public sector reform and spending cuts, as well as the anticipated eventual turnaround of the country’s own domestic economy and the impact of the worldwide recovery.

In the plan submitted to London the CIG has stated that the adoption of four key strategies will reduce spending and increase earnings over the next three years to turn the current budget deficit into a surplus, reduce the country’s debt and add to the government’s cash balances and grow the reserves. These are public sector management and spending reform, limits on new borrowing, a realignment of revenue bases and the use of public finance initiatives.

In his budget address on Tuesday the premier said the improvements in the country’s fiscal fortunes would be as a result of gradual economic recovery, which is expected to start in 2011. McKeeva Bush predicted a strong rebound of tourism-related services, the start of a number of new construction projects and a modest recovery of the financial services sector.

“Apart from pursuing fiscal prudence, the projected international economic recovery is expected to fuel the local economy. In addition, the private sector led investment strategy is forecasted to bear fruit in the medium-term, and this in combination with external driven demand would boost government revenue,” Bush told the Legislative Assembly. “The fiscal recovery is achieved by expenditure control and revenue growth stimulated by increasing economic activity.”

The three-year plan depends on a number of variables, not least the hope of considerably more inward investment into the country as well as recovery in various sectors. Although the premier has warned of increases in duty, with the exception of 25 cents on fuel this financial year the plan does not give specific details of what other increases in consumption taxes the country is likely to face.

Rejecting direct taxation, the three-year plan focuses on consumption based fees through customs and Bush said government plans to examine the full list of tariffs under the Cayman Islands Customs Law with a view to adjusting them. “This type of fee has the benefit of spreading the burden across the wider community while minimizing the impact on businesses,” he added.

The three-year plan, now a public document, points to major public sector reform and the implementation of a number of the recommendations in the recent Miller/Shaw report. Government also plans to use the results of the current internal civil service review to cut operating expenses. According to the predicted figures, spending cuts form a key part of the plan but details of exactly what will be cut over the coming years have yet to be revealed. The plan talks about early gains with cuts of more than 10% (later increased to 11%) in the spending appropriations initially planned for the 2010/2011 fiscal year. Some of the significant future spending cuts are likely to come as a result of the government’s decision to look at divestment.

Government will also be looking to the private sector to finance the country’s major capital projects in future, which will in turn limit its need for future borrowing. Government says it will now pursue a low borrowing policy over the next three years, limiting new capital expenditures to a nominal amount, which is not to exceed CI$25 million (approximately 1% of GDP) in any of the three years.

The plan will also depend heavily on a number of outside influences and creating a business friendly environment. Bush said in the immediate term there would be minimum increases in fees, as the plan points out that the increase in work permits has likely driven business away.

“The experience of the current fiscal year indicates that the economy is at the point where further taxes will very likely cause direct harm to the economy. The attempt to raise significantly work permit fees for foreign workers, for example, has likely contributed to firms restructuring their personnel to work from other jurisdictions outside the Cayman Islands,” the plan states. “This has not only resulted in lower than expected work permit fees but has also contributed to a reduction in the level of spending within the local economy.”

Government hopes to increase the physical presence of financial services firms, target new sources of business in Asia and facilitate major investment projects, which it says can generate close to $2 billion in the next five years. From the proposed cargo port in East End to the new hospital project, the projects are expected to generate jobs and bring in significant revenue to government according to the plan.

See full document: The CIG’s 3 Year Budget Forecast (2010/2011 to 2012/2013) presented to the FCO 24 May 2010

Local lawyer listed with world experts

Cayman News | 17/06/2010 | 0 Comments

(CNS): A Cayman Islands lawyer has been listed as one of the world’s experts on investment in a leading industry publication. Neal Lomax a partner at the Cayman Islands’ Mourant Ozannes office joins a number of legal specialists in the ‘2010 Expert Guide to the World’s Leading Investment Funds Lawyers’, published this month by the Legal Media Group. Several lawyers from Mourant Ozannes have been included in the ‘2010 Expert Guide to the World’s Leading Investment Funds Lawyers’, published this month by the Legal Media Group.

To be rated as world leaders in their field the funds lawyers were nominated by clientsand leading industry figures based on their work and reputation, followed by a review from a panel of impartial experts in legal centres worldwide.

As well as Lomax the “world’s leading” list includes Gavin Farrell, Peter Harwood, Paul Christopher, David Moore from Mourant Ozannes Guernsey office and Edward Devenport, Ben Robins and Jacqueline Richomme from Jersey.

“We are delighted that our funds partners from across the firm have been recognised in this way,” Jonathan Rigby, Group Managing Partner at Mourant Ozannes, said. “We strive to be consistently recognised as the leading law firm offshore and for our funds lawyers to be rated as world leading is a fantastic achievement.”

The Legal Media Group have been publishing international guides to individual lawyers in specific practice areas and jurisdictions for over 15 years, with a new edition of each Guide being published every two years.

On 1 June 2010 Mourant du Feu & Jeune and Ozannes, merged to create Mourant Ozannes. Mourant Ozannes draws on the heritage of two market leaders and has approximately 200 fee-earners and 50 partners practising from offices in the Cayman Islands, Guernsey, Jersey and London.

Cayman to suffer as funds migrate to Europe

Cayman News | 17/06/2010 | 32 Comments

(HMFWeek.com): Zais Group, is moving around $500m of assets held in the Cayman Islands to Luxembourg, HFMWeek has reported. The fund manager will move all its funds with European investors away from Cayman because of the encroaching regulation that will place restrictions on funds marketing to European investors. Luxembourg is becoming an increasingly popular destination with fund managers. As funds consider reshuffling their structures to conform to the AIFM Directive’s restrictions on the marketing of US managed hedge funds to European investors, Cayman looks set to suffer the biggest impact, should hedge funds and their European investors decide to migrate their holdings away from the island.

Last week, HFMWeek reported that SkyBridge Capital was considering creating Luxembourg Sicav versions of two Cayman-based funds of hedge funds (FoHFs).

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World cup shock as Swiss steal win over Spain

Cayman News | 17/06/2010 | 0 Comments

(Reuters): Switzerland pulled off the biggest shock of the 2010 World Cup so far when they beat European champions Spain 1-0 in Group H on Wednesday, their first ever victory over their opponents in 19 games.Gelson Fernandes’ (left) goal after a mix up in the Spanish defence gave the Swiss a shock 52nd minute lead and Spain, for all their talent and guile, were unable to find a way through the massed ranks of white Switzerland shirts. The Swiss share the lead in Group H with Chile, who beat Honduras 1-0 earlier on Wednesday. After a forgettable first half, the Swiss looked like spending another 45 minutes defending for their lives until goalkeeper Diego Benaglio’s long clearance was allowed to bounce and Fernandes pounced when the ball emerged from a clutter of bodies.

The European champions, many pundits’ favourites towin the tournament, enjoyed a near monopoly of possession for much of the game but were unable to convert the chances they created.

Coach Vicente del Bosque, who had started the match with David Villa as a lone striker, brought Fernando Torres and Jesus Navas on after the goal to try and rescue the game but they were unable to find a way through.

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Mac lauds new UK relations

Cayman News | 16/06/2010 | 16 Comments

(CNS): Relations between the Cayman Islands Government and the United Kingdom appear to have taken a turn for the better in the wake of the British election. Premier McKeeva Bush told the Legislative Assembly during his budget address on Tuesday that the last four weeks had been far more positive and constructive than the last 12 months in regards the relationship with the Foreign & Commonwealth Office. He also said the governor had shown a new approach during the talks with London when he saton the Cayman Islands side of the table and not the UK. “He spoke for us,” Bush told the Legislative Assembly, pointing out that no governor he knew had ever done that before. (Photo by Bina Mani)

Bush said things had got off to a good start with the new UK Overseas Territories Minister,adding that he had made no secret of his desire to see a new administration in London after the election. “This relationship has been somewhat renewed recently with the election of a new government in the UK. I think it is very safe to say that there is a world of difference between the nature of that relationship over the past 12 months as compared to the one recently established over the past 4 weeks,” Bush added.

During his 2010/11 budget presentation the premier spoke about the need to involve the UK in Cayman’s finances as a result of the need to borrow again this year and the subsequent agreement over the proposed three year financial plan. He said it had been embarrassing for a country that always boasted financial independence to have to seek the FCO’s permission but the new UK government had offered its full support for the national recovery plan.

Having met the Henry Bellingham, the UK’s new Under Secretary with responsibility for the Overseas Territories, Bush said he had received approval to borrow without introducing new taxes. The premier emphasised that there would be no income tax and no property tax and the two countries had entered into a more positive partnership.

He had been hoping for some change, Bush admitted, which would provide an opportunity to improve Cayman’s relations with the UK when it would treat the commonwealth and the Caribbean more favourably.

“It appears thus far that, we have got that,” he said as he explained that he had tabled the letter from Bellingham in relation to the meeting demonstrating the change.

“In his letter Mr. Bellingham agrees with my own assessment that the meeting was extremely constructive,” Bush said. “He is looking forward to a more dynamic and positive relationship between the UK and the Cayman Islands…..Mr. Bellingham agreed to and offered support to the government in its initiatives as laid out in the three year plan. This included ensuring that the plan was fully implemented and that there was an annual progress report on its implementation.”

According to the letter from Bellingham, a Conservative member of the new coalition government he appears to be more supportive of the UDP government’s desire to divest public sector assets, something Chris Bryant the former Labour Overseas Territories Minister had been less than enthusiastic about, warning of the dangers of disposing of assets. Bellingham said he wished to see the proceeds of divestment utilized for a sinking fund to rebuild reserves and pay off existing debt.

“The UK agreed to, and also fully supported the Government’s plan to restructure existing loans, including the recent bond issue — to improve our cash flow and reduce interest costs,” Bush stated.

“Over the past year, my administration has been working hard to improve the Government’s fiscal crisis and restore prudentfinancial management to this country. The new UK administration appears to have an appreciation of our efforts and Mr. Bellingham expressed his appreciation for our determination to restore sustainable public finances to the Cayman Islands,” Bush added.

The premier said the country had never asked the UK for anything other than understanding and support for policies that improve the lives of the people. “We are therefore grateful for this improved partnership and look forward to working with the new administration in the UK and I certainly hope that we can now move forward with a renewed and more positive partnership,” Bush stated.

In his letter to Bush, Bellingham said he appreciated the tough decisions that had already been made by the premier to reduce the deficit. Although Bellingham said he had expressed concern in a previous letter over the amount of borrowing he was pleased that Bush was able to reduce the amount by some $52million and agreed that there would be no more borrowing this year.

He said the three year plan was ambitious but the measures contained must be fully implemented and for the government to publish it and keep the country informed. E also asked Bush to ensure the Cayman Islands have a full up to date set of audited accounts by the end of the next financial year.

Letter from Henry Bellingham

CIMA assessing Motor and General suspension

Cayman News | 16/06/2010 | 2 Comments

(CNS): Following media reports from Trinidad that Central Bank officials have suspended the operations of Motor and General Insurance Company there, the Cayman Islands Monetary Authority (CIMA) has said it has been in close communication with the CBTT, management of Motor and General Insurance Company Ltd., and PricewaterhouseCooper, the auditor’s engaged by the bank. The local regulator said it was actively assessing the options to protect the company’s domestic policyholders and the assets of the company’s Cayman operations, as well as to safeguard the public interest.

CIMA did not say how long it had been communicating with the parties or how many people could be affected by the firm’s financial difficulties. However, there are believed to be a considerable number of people insured by the company as it is one of the oldest insurance firms in Cayman. The authority said it would provide further information to the public when an assessment had been completed.

Trinidad’s Inspector of Financial Institutions at the Central Bank, Carl Hiralal, took regulatory action and ordered the doors of Motor and General closed for an initial period of 60 days after the Port of Spain-based insurer firm was struggling to maintain the required quantity of money in its statutory fund. “This was necessary to protect policyholders," Hiralal said during a press conference in Port of Spain yesterday.

Motor and General provides insurance coverage to clients in Trinidad & Tobago and from an office in the Cayman Islands.

All new business has been suspended at the company but existing insurance policies remain in force, though no claims can be paid while the company’s operations are suspended. Hiralal said the temporary suspension did not mean the company was in receivership but provided an opportunity to assess its financial status. Brian Hackett of accounting and auditing firm Pricewaterhouse-Coopers has been engaged by the Central Bank to assist in this process. The company has reportedly had problems over several years in filing financial statements to the Central Bank.

It also had challenges maintaining the required quantity of money in its statutory fund, and its accounting records made it difficult for the company to keep track of its claims, Hiralal added.

Teen charged in cop shooting

Cayman News | 16/06/2010 | 0 Comments

(CNS): The sixteen year old boy who has been charged with robbery and two counts of possessing an unlicensed firearm in connection with a gas station robbery on 11 June has now been charged with attempted murder. The teen appeared in court this morning regarding the robbery and firearms charges but was remanded in custody and listed to appear before the chief magistrate on Friday 18 June. The police have now also charged the young man with attempted murder of police as a result of shots which were fired on officers during a chase which ensued after the robbery. (Photo by Dennie Warren Jr)

The boy cannot be named as he is a minor and as he was the only suspect charged in the case, although three other men have also been arrested in connection with the same robbery. Police say they have released one man on police bail while two others remain in custody as enquiries into the incident continue.

The armed robbery took place at Mostyns Esso in Bodden after which the young suspects escaped in a stolen car. They were pursued by the police when the getaway vehicle did notrespond to police sirens and lights. The suspects abandoned the car in the Lower Valley area and officers were fired upon when they gave chase on foot. The teen and one other man were then arrested. Police said that evidence and a load firearm had been recovered.

The getaway car turned out to be the vehicle stolen from an employee of Grand Old House who was car jack and assaulted with the butt of a firearm on Thursday 10 June in South Sound.

Trinidad Central Bank suspends Motor & General

Guest Writer | 16/06/2010 | 2 Comments

(Trinidad and Tobago Guardian): Motor and General Insurance Company was suspended from carrying out most of its operations yesterday by the Central Bank, said Carl Hiralal, Inspector of Financial Institutions.“Earlier this morning, the Central Bank took regulatory action and intervened to protect the policyholders by suspending the operations of Motor and General Insurance Company Ltd. The suspension is for an initial period of 60 days. Based on the results of our monitoring, this has become a necessary step to protect policyholders.” Hiralal made this disclosure yesterday at the Financial Stability Report mid-term review at the Central Bank, Independence Square, Port-of-Spain. Giving reasons why this action was taken, Hiralal said the company did not comply with basic regulations.

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Archive for June, 2010

DoT closes US regional offices to save cash

Osborne plans to scrap UK’s financial regulator

Plan depends on cuts

Local lawyer listed with world experts

Cayman to suffer as funds migrate to Europe

World cup shock as Swiss steal win over Spain

Mac lauds new UK relations

CIMA assessing Motor and General suspension

Teen charged in cop shooting

Trinidad Central Bank suspends Motor & General

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