In a move to change its reputation as a Tax Evasion destination, the Cayman Islands are set to introduce reforms which will disclose the names of previously hidden companies and their directors.
The Cayman Islands Monetary Authority (CIMA) is proposing the creation of a public database which will list a directory of hedge fund directors as well as all the names of funds domiciled on the Islands. The Cayman Islands have been criticized for years for its minimal disclosure statements and extremely high privacy standards – which have caused the Cayman Islands to be a magnet for possible Tax Evading practices.
US and EU policy makers and regulators have been angered in recent years due to the fact that the Caymans have not kept pace with new global regulations aimed at decreasing tax evasion. It is hoped that this move by CIMA will silence the critics and increase the number of professional and private funds on the island. There has been a significant decrease in domiciled funds since 2009.
According to one CIMA document, “In the 24 months subsequent to the onset of the financial crisis, the BVI Financial Services Commission, the Central Bank of Ireland, the Jersey Financial Services Commission, the Bahamas Financial Services Board and the Isle of Man Supervision Commission all updated their corporate governance codes, laws and/or regulations.”
This proposal to create a public database is thought to be a step in the right direction in terms of keeping up with other offshore fund destinations.
Source: Financial Times.