#08 - In this issue:
GUERNSEY PLANS TO REINFORCE INVESTMENT BUSINESS SUCCESS - LIBERALISED FUND REGIME PROPOSED
The report of a Committee chaired by Advocate Peter Harwood, tasked with ensuring the continuing health of the investment sector, is published today. It recommends some fundamental changes to regulatory lawsFull story on page.14
SEGREGATED PORTFOLIO COMPANIES – ANY DRAWBACKS?
Protected cell legislation exists in a number of jurisdictions around the world with the major offshore jurisdictions taking the lead in this respect. The concept is relatively straightforward. A particular type of company can be incorporated which is able to create one or more cells in order to ring-fence pools of assets and liabilities within the company. Generally, a creditor dealing with one particular cell can only have recourse to the assets of that cell and is denied recourse to the assets of other cells or the general assets of the company. The Cayman Islands insurance industry, in particular, has been keen to utilize the vehicle but what are the drawbacks and the challenges? Full story on page.15
NEW BVI CONFLICT OF LAWS RULES RELATING TO TRUSTS
Since trusts governed by the laws of the British Virgin Islands ("BVI") usually have significant legal links with the laws of one or more other jurisdictions, it is essential for the BVI to have adequate rules for resolving "choice of law" questions relating to trusts.
Although the majority of the provisions of the English Recognition of Trusts Act 1987 (incorporating as it does most of the provisions of the Hague Trusts Convention) have been extended to the Territory, so ensuring a certain amount of certainty in relation to many of the relevant conflict of law rules relating to trusts, specified matters are expressly excluded from that Act, meaning that it is vital for these rules to be reinforced by additional statutory provisions Full story on page.16
HOW TO SET UP YOUR OWN HEDGE FUND.
Traders and money managers often dream about one day running their own hedge fund, managing large sums of money, and competing head to head with the world's top traders. For many, though, this dream remains unfulfilled, because they do not know where to begin and do not want to squander their resources "reinventing the wheel." Full story on page.18
CONYERS DILL & PEARMAN ESTABLISHES PRESENCE IN DUBAI
Conyers Dill & Pearman, the offshore law firm, is continuing with its strategy of progressive, independent and organic growth by establishing a presence in Dubai. Full story on page.22
OECD ISSUES DISCLAIMER ON 2000 BLACK LIST
In a move that is long overdue, the OECD has finally issued a disclaimer to the 2000 Progress Report, in a press release. In a press release they stated, "The [2000] report includes a list of tax havens…that list should be seen in its historical context". This list was the infamous "black list" that cast a negative light on the financial systems of the countries listed, including St. Vincent and the Grenadines. The release further acknowledges that "more than five years have passed since the publication of the OECD list contained in the 2000 Report and positive changes have occurred in individual countries… the list has not been updated to reflect such changes." In other words, the OECD is now saying that it is not safe to rely on that list in determining the reputability of a particular financial center. Full story on page.28
ASSET PROTECTION WITH SOLID FOUNDATIONS
Trusts can be used to protect your assets and protect your loved ones. Trusts are a popular asset protection tool but they do have limitations, meaning they are not the best asset protection solution for all investors. Using a foundation as part of your wealth management strategy can provide additional protection and peace of mind not available with trusts. Full story on page.29
WALKERS SEES RISE IN HEDGE FUND FINANCING FOR DISTRESSED FUNDS –
HIGH-RISK, HIGH-RETURN OPPORTUNITIES ATTRACT INVESTORS
Walkers, the global offshore law firm of choice for investment banks, international law firms, collateral managers, and other financial institutions, said that the trend of hedge funds investing in distressed funds that are in liquidation has grown significantly over the past two years, due in large part to the simultaneous increase in the capital managed by hedge funds and the number of distressed opportunities. Full story on page.34
GUERNSEY ANTICIPATES MORE FAR EAST FUND BUSINESS.
Guernsey is poised for an increase in fund business with the Far East following the signing of a Letter of Intent between the Guernsey Financial Services Commission and the Hong Kong Securities and Futures Commission. Full story on page.35
LEADING OFFSHORE FIRMS APPLEBY SPURLING HUNTER AND BAILHACHE LABESSE MERGE
Leading offshore firms Appleby Spurling Hunter and Bailhache Labesse will unite business operations on 1st September 2006. The merger will create the only offshore provider of legal, fiduciary and administrative services with a major foothold in four of the world's leading offshore business centres – Bermuda, the British Virgin Islands, the Cayman Islands and Jersey – as well as a presence in the major financial centres of London and Hong Kong. The combined group will be known as Appleby Hunter Bailhache and will have a projected staff worldwide of nearly 600 employees, including 44 partners. Full story on page.36
IMPACT STUDY ON THE BANKING INDUSTRY IN THE CAYMAN ISLANDS
The Cayman Islands Financial Services Association (CIFSA) has endorsed the results of a recent economic impact study carried out on the banking industry in the Cayman Islands. The study, which was commissioned by the Cayman Islands Bankers' Association (CIBA), estimates the banking sector contributes about 25% of the GDP of the
Cayman Islands. "The banking sector is a core part of the overall financial sector in the Cayman Islands and is the most established, so it is important to understand in quantitative terms how it contributes to the economy," said Mr Eduardo D'Angelo P. Silva, CIFSA Director and CIBA President. Full story on page.37
THE CAYMAN ISLANDS MONETARY AUTHORITY (CIMA) EXTENDS CROSS BORDER NETWORK THROUGH MOU WITH CANADIAN REGULATOR.
The Cayman Islands Monetary Authority (CIMA) and the Office of the Superintendent of Financial Institutions Canada (OSFI) recently signed a memorandum of understanding that will provide a framework for cross border cooperation between the two countries and further extends CIMA's international cooperation network. Full story on page.38
GUERNSEY FUND GROWTH – "EXCEPTIONAL"
The increase in fund business in Guernsey demonstrated by statistics for the first quarter of 2005 is exceptional, says Peter Niven, Chief Executive of GuernseyFinance. The overall total of funds under management increased by 24.5% during the year, to just under £60bn. The Investment Division of the Guernsey Financial Services Commission
has reported a 41% increase in open-ended funds and a 22.4% increase in closed ended funds, to £36.3bn and £23.6bn respectively. Full story on page.40
JERSEY'S FINANCE INDUSTRY CONTINUES TO SET NEW RECORDS.
Jersey's Finance Industry has started 2006 in a bullish mood, reporting another quarter of strong growth. The funds sector in particular has continued to perform strongly, surpassing the previous record levels reached at the end of 2005. The Net Asset Value of funds under administration in Jersey has risen by almost 50% compared to the same period last year to reach a new record high of £156 billion.Meanwhile, the total number of funds serviced in the Island has broken through the 1,000 barrier. Full story on page.40
WALKERS SEES CHANGES IN MIDDLE EAST PRIVATE EQUITY MARKET;
INCREASINGLY SOPHISTICATED PRODUCTS AND LARGER DEALS MORE COMMON.
Walkers, the global offshore law firm, said that there has been rapid growth in the private equity market in the Middle East in both the number and size of funds. The firm reports that growth in the market is bolstered by the fact that typical private equity fund structures are consistent with Shari'ah principles of sharing in risks and rewards commensurate with capital contributions, making private equity investments particularly attractive to Islamic investors. Full story on page.41
