Archive for July, 2010

NIC on the hunt for new investors

Cayman News | 16/07/2010 | 11 Comments

(CNS): The recently formed National Investment Council (NIC) said this week that it has now met the people involved with more than a dozen new projects, ranging from tourism products and fund administration to the information technology arena, and evaluated those projects. NIC Chairman William Peguero said the council’s goal was to co-ordinate Cayman’s various business sectors and government policies to encourage new investment. He said the NIC was exploring viable strategies to stimulate and grow Cayman’s economy to generate new forms of revenue.

“All business sectors are interconnected and there has to be a collaborative effort between the macroeconomic policies that are being developed by the government and the policies and procedures implemented by business agencies,” Peguero said. “The goal of the NIC is to align both public and private sector demands to open the doors for increased revenue to the islands.”

Transparency in investment policies, efficiency in investor facilitation and improvement in the investor approvals process is essential to boosting confidence in the jurisdiction, the council believes. It aims to meet those needs by facilitating the formulation of policy guidelines on foreign investment in all sectors of the economy, reviewing applications submitted by investors, providing recommendations to investors, monitoring application progress, providing assistance with resolving problems pertaining to investment projects and establishing procedures to ensure effective coordination between the relevant government agencies and boards, a statement from the council revealed.

It did not say, however, how close the council was to recruiting any new investors to the islands or to the implementation of any specific private sectors projects that would generate new cash for government coffers.

The statement said that since the council’s formation at the start of this year, members have aggressively been evaluating measures to generate new forms of revenue and have actively been strategizing on ways to draw new commerce and investment to the country.

“We are positive that our collaborative approach and support of both the private and public services will help us meet pressing demands and set a strong economic foundation that will position Cayman for economic success into the future,” Peguero added.

The NIC is an integrated body of key business leaders designed to bridge the gap across Cayman’s various business sectors. Intended to gather input and recommendations from different organisations, boards and committees its goal is to create an economic blueprint to move Cayman forward.

The council members are James Bergstrom, Michael Ryan, Burns Conolly, Marcus Cumber, Jim O’Neill and Dax Basdeo and reports to a special Cabinet Committee, chaired by Premier McKeeva Bush and supported by the Investment Advisory Committee (IAC), which consists of senior civil servants across immigration, planning, environment, employment relations, customs, tourism, financial services and agriculture.

Dragon Bay canals too deep

Cayman News | 16/07/2010 | 107 Comments

(CNS): Following revelations that the developer of the Ritz-Carlton was given planning permission to remove a 300 foot mangrove buffer zone on the Dragon Bay development site recently, an FOI request by a member of the public has now revealed that he has also been given planning permission for dangerously deep canals. The documentation reveals that the Central Planning Authority (CPA) gave the Dragon Bay developer permission to excavate a canal system as deep as 20 feet while remaining connected to the North Sound. The depth is more than double the maximum recommended and is described by the Department of Environment as a “dangerous precedent” with far reaching environmental consequences. (Photo by Dennie Warren Jr)

In a letter to the CPA chair written in November last year in the wake of the authority’s decision, the DoE Director Gina Ebanks-Petrie points out that it was a serious step backward in environmental considerations with respect to canals. “We believe this decision to be short sighted and one which will set a dangerous precedent with far reaching repercussions for the natural environment of the Cayman Islands,” Ebanks-Petrie wrote.

The director pointed out the copious research which revealed that canals dug beyond 9 feet, as recommend by the Wickstead Report as far back as 1976, showed serious environmental problems, from negative impacts on water quality to the reduction of biodiversity. Local recommendations on canal depths are based on efforts to safeguard water quality and the marine life that they would be connected to. The director pointed out to the planning chair that they were based on sound and rigorous scientific research. In the US more recent research indicates that canal systems should be limited to six feet.

The letter also noted that with years of canal development in the North Sound area there was an even greater need to restrict depths than ever before rather than extending them the as the CPA had done with the Dragon Bay development. The director requested an opportunity to talk to the CPA about the decision and present them the full details of why the decision was dangerously detrimental, which the CPA accepted. Despite the case made by the DoE, however, the planning permission was not reversed and developer still has permission to dig the dangerously deep canals.

According to the FOI documents, which were released by the Water Authority, the Aggregate Advisory Committee also wrote to the CPA pointing out that research regarding excavation pits had indicated they should never be connected to the sea and it said the aggregate policy was never intended to promote any kind of canal excavation beyond 14 feet that would be connected to the sea.

Scott Slaybaugh, chair of the committee and the author of the letter, wrote that connecting anything deeper than that to the sea would have “devastating impacts on marine natural resources”. He pointed out that the AAC was also guided by the 9 foot limit in the Wickstead Report when it cameto canals. Slaybaugh pointed out that research undertaken by the committee regarding inland excavation of 20 feet that would impact ponds revealed significant noxious odours and damage to the pond and surrounding areas, which might be an acceptable risk if the pond was not connected to the sea. “On the other hand, poor water quality in a pond connected to the sea has a much broader and unacceptable risk.”

The person who requested the information told CNS that he is still waiting for correspondence regarding this planning permission from the CPA.

Document released under FOI:

WA policy for excavations – final November 2002

CPA policy clarification on depth of excavation

DoE letter to CPA re Dragon Bay 18 Nov 2009

Mac introduces PADs

Cayman News | 16/07/2010 | 26 Comments

(CNS): Although the passing of the amendments to the Development and Planning Law and the new regulations have caused some controversy, government, opposition and the independent member agree that a lot of the law is positive and will modernise the country’s future development, remove red tape and improve enforcement of regulations. It also introduces a new type of development that government says will facilitate modern, mixed use, urban projects. Delivering the amendments in the Legislative Assembly last week, the premier, who has responsibility for development and planning, announced the creation of planned area developments, or PADs, under section 6 of the law. (Photo by Dennie Warren JR)

“My government’s amendments to the law will enable and facilitate public-private fostering of worldwide trends in planning and urban design and to allow the proper regulation of the larger developments,” Bush explained. “Planned Area Developments, PADs, are larger master-planned, mixed use developments with a minimum of 40 acres of land and at least three different land uses that, subject to regulations regarding application requirements, will help ensure that large developments employ sound principles of effective and efficient land-use planning.”

The goal, the premier said, was to ensure that the larger developments become more transparent to the Central Planning Authority and the country and that they are developed in such a way to minimize their impacts on the surrounding infrastructure and neighbours. “PADs legislation is now needed to deal with the larger, mixed use developments that we are seeing coming to our islands,” Bush stated.

Planned area developments, also referred to in some jurisdictions as ‘planned unit developments’, have been proposed by the Planning Department for many years, and Bush said he was proud to have finally brought this concept to the House for inclusion in the planning regulations. “Many countries have moved to allow planned area developments, which provide a more completely designed and sustainable style of development,” the country’s premier told the Legislative Assembly.

Bush said these developments would be required to cover a minimum 40 acres of land or a group of contiguous parcels, have three different land uses proposed for close interaction, provision of up to 5 percent land for open space to serve the development, an internal circulation network that minimizes conflicts with existing public roads, and have the necessary infrastructure and services that will minimize the impact on the islands’ existing infrastructure.

PADS are also restricted from being dangerous, obnoxious, toxic or cause offensive odours or conditions or create a nuisance or annoyance to adjacent properties, as well as complying with all applicable regulations regarding fire, health and public safety. The premier said they will be permitted in all areas, except industrial, public open space and mangrove buffer zones.

Developers of PADs will be required to submit a ‘development statement’ to set out to the CPA the development parameters, including appropriate plans to explain the proposed development and its overall design, infrastructure impact, proposed land use, covering everything from parking lots and street furniture to sewage disposal systems and telecommunication facilities, as well as the timeframe for the project.

This will ensure that future PADS will be more transparent to the wider public from inception and the developments will be monitored in accordance with their submitted statements.
“If the CPA approves a planned area development, the authority shall require a copy of the approved master plan, together with the approved planning statement, to be lodged with the director of planning, who shall keep a register of all approved planned area developments,” Bush said.

The premier revealed that the fee for such developments would be $500 per acre, but this would be merely for the review of the PAD application. He said regular planning, building control and infrastructure fees would still apply on application for specific buildings within the planned area development.

On line advertising to boost Google profits

Cayman News | 15/07/2010 | 0 Comments

(WSJ): Google Inc. (GOOG) is expected to report sharp gains in second-quarter profit and sales after the market’s close Thursday, as the Internet search giant is seen benefiting from a sustained pickup in online advertising. Wall Street is generally banking on a continued uptick in online advertising during the quarter, which should benefit Google as the leading provider of relatively affordable online-search advertisements. In addition, Google boasts a growing online display-advertising business, which may also benefit from an increase in spending during the first half of this year.

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Fat causes memory loss in pearshaped women

Cayman News | 15/07/2010 | 0 Comments

(CNN): A woman’s body shape may play a role in how good her memory is, according to a new study. The more an older woman weighs, the worse her memory, according to research released this week from Northwestern Medicine at Northwestern University in Evanston, Illinois. The effect is more pronounced in women who carry excess weight around their hips, known as pear shapes, than women who carry it around their waists, called apple shapes. The reason pear-shaped women experienced more memory and brain function deterioration than apple-shaped women is likely related to the type of fat deposited around the hips versus the waist.

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All change for ‘All talk’ and email

Cayman News | 15/07/2010 | 35 Comments

(CNS): Local telecommunications provider LIME has announced a number of changes to its services and packages. The All Talk package which offered LIME customers 6,000 minutes a month to any LIME number is splitting into minutes, texts and internet space, while Google is now hosting LIME’s email platform. Anthony Ritch, LIME General Manager, said the new partnership with Google will not only provide access to email but many new portal features for customers. Over the last few weeks LIME residential internet customers have been moved across to the new platform which explains recent glitches in service.

“It’s an exciting move for LIME to partner with Google,” Ritch said. “We are giving our customers access to web based services and apps that they previously didn’t have access to on our old e-mail platform. Our customers will now be able to collaborate on documents, calendars and e-mail with the entire Google community. Another great advantage is that wherever they are in the world they will be able to check their mail over the web with IMAP software (Outlook) or with a mobile device like the Blackberry – all synchronized.”

He said customers will also retain their existing e-mail addresses. “Many of our customers love their candw.ky address and don’t want to lose it,” Ritch added, "and I’m also pleased about that.”

The new portal gives each customer 7 Gigabytes of email storage and comes with all the Google services, such as chat, calendar and docs. “I’m excited about this partnership as once again we have listened to what our customers have been asking for and provided it. There are so many new features for customers to explore and a great Google Apps Help Centre which walks them through how to use the applications, or they can simply watch the video to see how Google Apps can help them communicate more effectively.” concluded Tony Ritch.

Meanwhile, the new All Talk Plus Plan will roll out on 1 August. Post-paid customers will pay the same CI$40 but will get 2,500 LIME Voice minutes instead of 6000, but they will now get 2,500 text messages to any LIME number and 1GB of LIME data instead. The firm said this gives customers an average of up to 10 times the value when compared to normal calling rates.

The company said very few customers came even close to using the 6,000 minutes under the plan but were having to pay on top for texts, which prompted the firms redesigned of the package.

“While our existing All Talk plan was extremely well received, the feedback from our customers indicated that the vast majority of them never use all the minutes available,” LIME’s Chief Commercial Officer Milton Brady said. “They indicated a preference for a mix of voice minutes, text and data. And that’s exactly what ALL Talk Plus offers. We believe that the new plans reflect the changing needs of our customers as more and more people are now using their mobile phones for texting as well as browsing the web.”

Prepaid customers will get a combination of 1,500 voice minutes for calling any land line or mobilenumber on the LIME network, 1,500 text messages to any LIME number as well as 1GB of data on the LIME network.

The new plan will automatically replace the existing All Talk plan for prepaid customers at the beginning of August and existing post-paid customers, currently on the plan can, if they wish, choose to take up the new All Talk Plus package or remain on their current All Talk package but the old package will not be available to new customers, the company said.

Cayman ready to benefit from high tax UK

Cayman News | 15/07/2010 | 33 Comments

(CNS): In the wake of recent comments about Cayman’s possible demise, the chair of Cayman Finance has said that Cayman’s financial services sector is robust and poised to take advantage of Britain’s and other European states’ high tax regimes. Anthony Travers said that far from “withering on the vine”, the Cayman Islands is flourishing in the current economic climate, which, he said, was understandable given that no Cayman Islands financial institution failed in the financial meltdown. With zero percent income, capital gains and corporate tax, the jurisdiction is drawing particular interest from Britons thinking of leaving the UK, Travers believes.

Speaking in the wake of less than favourable reports about Cayman in the Financial Times this week, he said the reports fly in the face of the statistics, as it was not only funds that were on the rise but company incorporations for 2010 in Cayman were also on an upward trend, with increases of over 14 % for Q1 and 24% for Q2.

Travers said that Cayman was also in the perfect position to benefit from the Capital Gains Tax increase in the UK. With CGT going up to 28 percent, an increasing number of investors were looking to move to Cayman. “We have said all along that punitive tax measures in the UK and the rest of Europe will drive individuals and companies offshore,” he stated. “Whilst we welcome this we are continually saddened that there is still a hard-line group of EU politicians who cannot grasp that low taxes stimulate economies and high taxes do exactly the opposite by creating less of everything, including very often, tax revenue. That is the basis for the success of the Cayman model.”

Travers noted that he was not the only one making these claims and pointed to remarks by Deloitte’s Lucy Hardwick who told The Sunday Times, “The increase in the CGT rate to 28% is a tipping point for many individuals. Some will be looking to relocate to another country to mitigate rates.”

Wildlife group calls on bird lovers for help

Cayman News | 15/07/2010 | 3 Comments

(CNS): As a result of the departure of a number of their valued volunteers, Cayman Wildlife Rescue urgently needs people to hand raise rescued baby birds for release back into the wild. The group needs people who can be at home with the birds all day and can feed them every hour from sun up-to sun down and can house them in a quiet secure environment. A two month commitment is needed and once the birds are raised they will be released into the wild at the volunteers’ homes. Alison Corbett, Programme Manager said it is hard work but very rewarding and called on the community to help.

“The programme has recently lost some valued volunteers and is in urgent need of new volunteers who have the time to hand rear nestlings. Although we have an extensive volunteer list we do not have many volunteers who are free during day time hours,” she explained. “We’re looking for individuals who work from home, are retired or are on summer break. Raising wild birds for release is hard work, but very rewarding and generally the birds can be released onto the volunteer’s property.”

Cayman Wildlife Rescue makes every attempt to restore nestlings to their wild families, but Corbett said it is not always possible. “Fallen nestlings are a growing problem, mainly due to lack of good nest sites in urban areas. Birds are often using palm trees, which do not provide a good nesting platform. Trees are also cut back at this time for hurricane preparedness,” she added.

The requirements for volunteers to hand raise baby birds are: availability to feed nestlings every 30-60 minutes from sun up to sun down; baby birds must be housed in a quiet and secure environment; volunteers must be able to commit to 1-2 months of care; volunteers will conduct the care from their home; volunteers must be of 18 years of age or older; volunteers who rent property must have the written authorization of their landlord.

Corbett also reminded people to look for nests before pruning trees or shrubs, and if anyone finds a baby bird, they are asked to call the LIME sponsored Wildlife Emergency Hotline 917-BIRD (2473) for help and support.

CWR has a tall ladder to assist with nest and nestling restorations and has trained wildlife rehabbers. Never attempt to care for wildlife yourself. Wild animals have special diets and demanding feeding schedules. They need the expert care of a trained volunteer.

The volunteer organisation also urges pet owner s to be responsible, noting that cats and dogs running free can easily kill baby birds learning to fly. Keep your dog safe in your yard and your cat inside to protect Cayman wildlife, they say.

Cayman Wildlife Rescue is a program of the National Trust for the Cayman Islands tasked with the rescue of sick, injured and orphaned wildlife for release back into the wild. It is financed by donations from the public and staffed entirely by volunteers. If you are interested in volunteering please contact Alison Corbett at caymanwildliferescue@gmail.com, you can also visit www.caymanwildliferescue.org.

For more information on volunteering to raise baby birds, please email Alison Corbett at caymanwildliferescue@gmail.com.

Democratic process eroding

Cayman News | 15/07/2010 | 62 Comments

(CNS): The government is closing down debate, not just in the legislative chamber but in the wider community, the opposition benches have said following the continued suspension of the usual twenty-one day discussion period on new legislation. Since taking office almost every new bill or amendment the UDP administration has tabled has come from Cabinet to the Legislative Assembly for vote in a matter of days rather than weeks, closing down the time politicians normally take to research proposed legislation as well as discuss it with their constituents. Arden McLean told CNS on Wednesday that this was a serious encroachment on the rights of the people to at least have their say on new laws. (Photo by Dennie Warren Jr)

The opposition member for East End explained that all of the opposition PPM members and the independent member had voted against the government’s attempts to rush legislation through this week without public consultation, but as government has the majority vote there is nothing the opposition benches can do but register their complaint with negative votes.

“The premier is circumventing the twenty-one day period, which would normally allow for public input, for us to talk to constituents and do research about the proposals so we can properly debate government’s plans,” said the PPM member for East End.

“We can’t stop it as the majority rules. We can row about it as much as we want but we can’t do anything other than register all out objections,” he added, explaining why the five PPM members and the Ezzard Miller, the independent member for North Side, had all voted against government’s move last week to once again suspend the Standing Orders of the House to circumvent the three week consultation period on the final draft of laws.

On Friday, Leader of the Opposition Kurt Tibbetts raised his concerns about the suspension of Standing Orders following the ‘no’ vote registered by the non-government members over three bills – the dormant accounts law, the amendment to the animals law and the substantial review of the planning law. “The vote was against the reading and not the content of the bills,” Tibbetts said, pointing out that the changes to the development and planning legislation were extensive and the opposition needed more time to examine the content and conduct some research.

It was revealed that the laws had been only been made available to the opposition late on Wednesday 7 July, just two days before the government was bringing them to the parliament to be passed. “We know government has to get on with the business but this really is too late to provide the opportunity for real scrutiny,” the opposition leader noted.

Alden McLaughlin also raised his concerns, as the debate continued on Monday, that democracy was being undermined and that there was a serious absence of consultation with the laws that were coming to the House. He noted that the amendments to the planning law and regulations should have been circulated more widely in the community for consideration and comment before giving them legislative effect.

“I don’t know why these laws need to be so rushed,” McLaughlin wondered aloud. “It seems that with every bill government is dispensing with proper procedures and not giving adequate notice.”

He acknowledged that government had to get on with its agenda but said the premier should refrain from rushing through every bill and denying the democratic process.

He also noted that there was no debate coming from other members of the UDP administration once the premier laid a bill before the House, McLaughlin said, adding that "the government benches sat mute” until the opposition had finished and the premier closed the debate.

The normal parliamentary process with legislation allows government to bring a law to the LA, place it before the House — and by implication the public — allowing the opposition and the wider community to examine the bill and then make any objections or suggestions known over a 21 day period.

Government is under no obligation to listen, but the three week wait allows for its proposals to be digested and understood within the community before they are passed it to law. Moreover, it allows for real organised opposition to take place and be squarely placed before government, or alternatively for the community to widely endorse government plans.

Although suspension of Standing Orders to remove that 21 day period is not unusual when legislation needs to be rushed in order to tackle immediate difficulties or threats to the economy, the country or the people, it is not usual procedure for all legislative changes.

McLean told CNS that the ability of a government to suspend the Standing Orders is there to help them deal with immediate problems but it is not usual or necessary for a government to suspend the order for every piece of legislation that comes before parliament. “Government is routinely suspending that order,” he added. “Removing the right for the people to have their say is a serious encroachment on democracy.”

The East End representative criticised the current administration for its lack of consultation with the wider public on important issues. He said that there had been no discussion as far as he was aware in the wider public about the planning amendments. McLean criticised the government in general for not circulating information and for no longer holding press briefings.

He said the opposition were receiving very little information about government plans until they were faced with the bills in the LA and then in a matter of days these were being passed into law with little or no input from the country at large.

Cayman funds still growing

Cayman News | 15/07/2010 | 29 Comments

(CNS): Despite dire predictions for the Cayman Islands hedge fund industry reported in the Financial Times this week, local figures paint a very differentpicture. As of 30 June there were 9,486 funds in this jurisdiction, an increase of over one hundred on the previous quarter. Other good news is that so far this year, authorizations have outstripped terminations each and every month. Ingrid Pierce, partner and head of Walkers’ Hedge Fund Group in the Cayman Islands, said clients continue to have the utmost confidence in the Cayman Islands as the domicile of choice when it comes to hedge funds, and despite concerns to the contrary, very few funds have either redomiciled or determined to set up funds elsewhere.

With clients among the world’s leading investment managers and financial institutions, Walkers reports a healthy flow of instructions for new funds to be established.

“Recent press commentary has pointed to a preference for new hedge funds to be domiciled in Ireland and Luxembourg at the expense of Cayman, however a more likely scenario is that these jurisdictions will co-exist with the Cayman Islands, each appealing to different if partially overlapping segments within the investor and investment manager communities,” Pierce added.

In a short article in the UK’s leading financial paper, The Financial Times, the future picture of the Cayman Islands hedge fund sector was painted as bleak, with some hedge fund managers stating that institutional investors are increasingly choosing to invest in funds that comply with Europe’s onshore Ucits regime rather than unregulated offshore hedge funds.

Mark Fleming, a partner at Tiburon Partners, an Asia specialist that runs both Newcits and Cayman funds, said that the Cayman Islands would “wither on the vine” and his firm would not open another Cayman fund.“If I was a Cayman lawyer with more than three or four years of career expectation I would wonder what I’m going to do with the rest of my working life,” he told the FT. Dan Mannix, head of sales at London-based RWC Partners, said his firm was also looking at redomiciling its Cayman funds into the EU. “Funds in offshore centres such as the Caymans are not favoured at the moment by the investment community,” he said.

However, Pierce pointed out that, while UCITS funds are suitable for particular strategies and investors with certain requirements, they are wholly unsuitable for a large number of other funds that continue to enjoy the benefits offered by funds established in Cayman.

“This shows that the Cayman model is incredibly resilient and this is borne out by the statistics on fund registrations as well as the experience of Walkers and other firms regarding instructions for the establishment of new funds,” she said.

Meanwhile, on Thursday morning Anthony Travers, Chairman of Cayman Finance, said he was bemused by the comments made to the FT. Based on CIMA’s figures, he predicted there would be in excess of 10,200 fund registrations by the financial year end. “This will exceed the all-time high watermark for the Cayman fund Industry,” he added.

Company incorporations were also growing again, he noted, with increases of over 14% for Q1 and 24% for Q2. “It is more helpful to report on the actual numbers rather than the wishful thinking on the part of competitor jurisdictions,” Travers observed.

“We take a statistical approach to these matters and will also look forward to comparing the performance metrics of our traditional and successful hedge fund product to the EU regulated ‘Newcits’ funds over the next couple of years. Monthly fund dissolutions in Cayman appear well within historical norms and do not evidence any trend towards redomiciliation. We would anticipate however that fund managers with a purely retail product will in the immediate term create a Eurocentric model but Cayman has not historically provided a UCITS product,” the Cayman Finance chair explained.

An article in Hedge Funds Review concerning Dalton Strategic Partnership’s doubling the investment risk of its Melchior European Fund in a bid to seek higher returns illustrated the point that Cayman offers a different kind of fund regime.

Magnus Spence, a partner in the firm, pointed out that traditional hedge fund investors are still prepared to take more risk in order to achieve higher returns outside of UCITS where investors are happy to sacrifice returns for a lower risk profile. Spence pointed out the need of the hedge fund sector to offer investors the choice. "If we want to be attractive to both types of hedge fund investors we need to be structured in the right products and we need to have the right risk return profile," Spence added.

Pierce pointed out that Cayman’s leadership of the investment funds industry as the domicile of choice for hedge funds has developed over time as a result of its pro-business, cost efficient environment within a strong system of regulation that adheres to international standards. Even though Cayman was catering to higher risk investors, she said, it was still likely to be able to maintain access to the European market.

“Looking at any of the likely conditions that non-EU countries would be required to meet in order for their funds to gain access to the European market, there is nothing to suggest that the Cayman Islands will not maintain its leading position and continue to play a valuable role in the international financial system.”

Over the medium to long term, Pierce indicated that it was unlikely that the AIFM Directive will adversely impact Cayman’s position. “Government has already demonstrated its commitment to do everything within its power, acting with propriety and integrity, to safeguard its place among the world’s leading international financial centres, including, where necessary, making amendments to its regulatory and legislative regime,” Pierce told CNS.

The statistics from CIMA reveal that despite the economic recession and the international criticism that Cayman and other offshore jurisdictions have faced in recent times, the hedge fund business here remains solid.

At 30 June 2010 there were 8929 registered funds in Cayman, 427 administered and 130 licensed. In January 158 funds were domiciled and 74 terminated, while in February there were 104 started and only 32 terminated; in March 100 came and 35 went; and again in April 96 new funds arrived compared to 28 which ended; In May 70 funds were gained compared to 36 terminations; and in June 57 were registered while 46 terminated.

The legislation which has caused someconcern for the local fund industry, however, is the proposed EU Alternative Investment Fund Managers directive which would block funds from outside the region from being marketed to Europeans countries unless the jurisdiction adopted “equivalent” legislation, a restrictive barrier few countries are expected to meet.

The controversial proposal provoked a storm of opposition, not just from offshore jurisdictions such as Cayman but also the US and Europe’s governments. As a result the EU is now engaged in an effort to reconcile the now three separate suggested versions of the AIFMD text produced by the European Commission.

Instead of an “equivalence” stipulation, it is expected that non-EU fund jurisdictions will need to meet four criteria, such as having co-operation agreements between their regulators and those in the EU, not being blacklisted over money laundering or terrorist financing failures, having tax treaties with Europe and allowing reciprocal access to their market for European products. This means the Cayman Islands would have much less difficulty in complying with the AIFMD and therefore the industry is far less likely to suffer any adverse effects.