Wednesday 28 October, 2020

Here are the premier's plans for the financial services industry

"The Financial Services Industry and its support eco-system has carried on through the recent turmoil, if not uninterrupted then certainly in strength," said the premier, Hon. Alden McLaughlin in his State of the Nation address in the Legislative Assembly yesterday.

The premier, in his address, outlined his plans for the sector, which he explained would have a two pronged approach, as follows:

First, we will continue our engagement with the European Union and building relationships in Brussels. Mr. Speaker, it feels to me that I have spent more time this term than anyone could have wanted travelling around Europe trying to persuade the EU of the bona fides of the Financial Services Industry in Cayman. Or travelling to the USA to reassure investors about the future of the jurisdiction. But this has been necessary and ultimately fruitful work.

I know we were all pleased that earlier this month the European Union acknowledged the work we have done to further strengthen our regulatory regime regarding funds and removed us from their list of non-cooperative jurisdictions for tax purposes. This was a significant achievement with all hands working over many months despite the pandemic. This work was greatly aided through our programme of engagement. But the job does not end here. As we know there will be other initiatives aimed at us and we will be ready.  

Secondly, the partnership with the industry must continue and be strengthened. Government and industry have separate but complementary roles to play in keeping the sector strong. However, we must and will move forward in lock-step to secure the future of the Financial Services Industry. 

The Minister for Financial Services has provided first-rate support through the process and her work in partnership with the industry has been crucial in providing the European Union and others with the evidence of Cayman’s commitment to the highest standards of international regulatory compliance. I thank the Minister for her hard work.

Let me quickly add Mr. Speaker, that whilst some may complain about the added requirements on a significant part of our Funds business, many in the sector believe that many benefits will accrue to these Islands, not least of which is the possibility of additional jobs and opportunities for Caymanians. 

In addition, the economic substance rules require that appropriate businesses must have an adequate amount of operating expenditure incurred in these Islands, have an adequate physical presence here, and have full time qualified employees also located here. Also, the new requirement for annual audited financial statements for closed-ended funds will add to the work needing to be done here. 

All this means that the changes are creating new job opportunities for Caymanians both directly in the financial services sector and indirectly as more money gets spent in our domestic economy.

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