The government and Cayman Finance have signed a memorandum of understanding governing the consultation of the private sector on legislative and other financial industry related issues.
Minister of Financial Services Wayne Panton announced the agreement at the Campbells Fund Focus conference on Nov. 15.
“The MoU is effectively going to set up the relationship that government will have with Cayman Finance in relation to consultation of industry-related issues, on specific matters that relate to legislation, products that we pursue, many issues in relation to existing fee levels, basically the overall consultation that we would like to have with our financial services industry,” he said.
While government does not intend to cut off any access from any part or business of the financial industry, Mr. Panton said, it would be helpful to have “one voice” or “one body” that represents the views of the industry to the ministry.
“Although dialogue now will be focused through Cayman Finance, wider consultation processes will continue to include all industry participants,” the minister said. “Government will continue to welcome all viewpoints, but it is important for industry to speak with one voice. As such, I would encourage broad participation through Cayman Finance, as active engagement by all firms in the industry will strengthen and encourage the advancement of our position as a leading international financial centre.” Gonzalo Jalles, the chief executive officer of Cayman Finance, said the agreement “formalizes the work we have been doing the last six months with the ministry, including jointly attending international events, managing international PR, and hosting local seminars for our community.”
As such, the agreement is a step in the right direction and follows what most of what Cayman’s competitors have done. “We can’t expect to be the leaders forever without investing in defending and promoting the industry in the same way Guernsey, Jersey and Bermuda are,” he said.
However, other panelists at the conference expressed their concern that the agreement not cut off input from parts of the industry that are not members of Cayman Finance.
Canover Watson, managing director of Admiral Administration, said the financial services industry has always struggled to have a unified or a single voice.
While he commended the government on the agreement, he noted that financial services are a very diverse industry that includes businesses of varying sizes, influence and participation.
“As this MoU and the agreements develop with Cayman Finance, I ask Cayman Finance and the government to be as inclusive as possible and capture as many of the different points of view.”
There are competing interests in the industry which will make the objective communication of the needs of the entire industry a challenging process, Mr. Watson said.
“We need to be careful that we don’t end up with a situation where we have just one single point of view and possibly exclude a significant part of the sector.” This will require reaching out to various industry bodies and smaller firms that are not always represented by Cayman Finance.
Graeme Sunley, a partner with PwC Cayman and president of the Cayman Islands Society of Professional Accountants, said, “it is absolutely right that Cayman Finance is the central voice into government and I congratulate Cayman Finance and the government on reaching an agreement.”
He also agreed with Watson, stating that as a representative of CISPA and the Alternative Investment Management Association, there are situations “where we really appreciate and look forward to having a direct dialogue with government around certain matters.”
Mr. Sunley said, ”CISPA and AIMA happen to be well connected, and in that respect this is a tremendously positive development, adding that he experienced the approach employed by Cayman Finance during the industry consultation on the implementation of the U.S. Foreign Account Tax Compliance Act.
“But there will be occasions for other organizations or associations where it will be appropriate for a direct connection with government to remain.”
Mr. Jalles said Cayman Finance has committed during consultations to survey and receive responses from the wider industry, just as the association did with regard to FATCA.