What does Cayman Finance actually do?

The boom years in Cayman perhaps made it too easy to ignore rumblings from uninformed pro-high tax journalists and politicians.
The flow of business during those times turned to a flood as Cayman took a dominant position as a domicile for offshore funds, debt structures, corporate structures and trusts.  It was obvious that the users of Cayman were comfortable with the regulatory structure and the entrepreneurial spirit that had made Cayman an important international financial centre flourished. But by early 2009, when the din from shrill, panicked voices of the international media and politicians grew in decibel level directly proportional to the increasing taxes required to pay their elephantine government debts, Cayman Finance (then the Cayman Islands Financial Services Association, or “CIFSA”) restructured and with a substantial war chest took to the road with a new public relations and lobbying crusade, aided by powerful public affairs representatives in Washington and London.
Cayman Finance hit the ground running, emphasising to the international media the truths about the Cayman Islands legal and regulatory structure and the economic philosophy upon which its financial services industry was formed. This work involved meeting and establishing ongoing relationships with the key journalists in the target centres of London, New York and Washington and the development of a set of key messages and background information, including a “Fiction vs. Fact” sheet (which is available on www.caymanfinance.ky).
This engagement often included taking journalists to task, denouncing the anti-tax competition mentalities that have driven their sentiments to date. Dozens of articles, letters to editors, rebuttals and clarifications were written and distributed. Hundreds of media outlets have been publishing Cayman Finance’s material, including The Times, The Daily Telegraph, The Financial Times and The Spectator (in the UK) and Bloomberg, The Wall Street Journal, Washington Post, Associated Press, ThomsonReuters and the Dow Jones Newswire (in the US).
One of the first pieces to be produced was the Chairman’s “Open Letter to President Obama” which corrected the President’s erroneous statements, which suggested the Cayman Islands performed illegal activities because it is a low-tax jurisdiction, by detailing numerous examples of the transparency of Cayman’s regulatory model. This letter received significant press coverage and set the stage for the assertive rebuttals against mischaracterisations that typified the Cayman Finance programme.
The other arm of Cayman Finance is public affairs. In order to genuinely effect change, a new level of engagement needed to take place with the legislators and the politicians in the United States and the United Kingdom. Cayman Finance, with assistance from our public affairs experts in Washington, Quinn Gillespie & Associates, was successful in contributing to the debate in Congress between Senator Levin’s “Stop Tax Haven Abuse Bill” and Chairman Bacchus and Grassley’s’ more business-friendly bill which supported a domestic policy approach to tackle tax avoidance based on transparency and reporting requirements. The Cayman Finance position, which ultimately found favour, established that substantive changes in tax policy could have negative impacts on both Cayman and US businesses competing in global capital markets and that a list-based approach was inappropriate.
Cayman Finance was the only party making a case in this debate and welcomed the final outcome as the Bacchus/Grassley Bill has now passed through the Senate. A press release applauding the result was posted on hundreds of financial and news websites.
It isn’t always easy. Changing perceptions is something done over the long haul. We do not have the luxury of resting after some short term wins. That being said, Cayman Finance’s success in the past year has been demonstrable. The public relations unit of the Cayman Islands Government’s Ministry of Finance have been tracking Cayman in the international media over the past few years and has recorded an 18 per cent increase in the incidence of positive press in 2009 over 2008. There has also been an increase in presence of Cayman sources in media coverage, which doubled from 2008 to 2009.
With a few notches on our belt in the international arena, and a new Board of Directors elected in January 2010, the emphasis for this year will be directed inward – offering assistance right here at home. The high level of business expertise on the Board is available to assist the Cayman Islands through its current challenges. The public-private sector partnership is vital to the success of Cayman as a competitive international financial centre and Cayman Finance is the organisation perfectly poised to offer a sophisticated advisory service not available from external sources. With our knowledge of the local market, the regulatory structure and our international connections, we are a resource ready to be tapped into.
Cayman is a success story – coming from humble beginnings, it has developed into a world-class international financial services centre while maintaining its island charms, which makes it an attractive place to live and to visit. Providing 54 per cent of the GDP, the health of the financial services industry is vital to the maintenance of our lifestyle going forward. The short point on this is, no matter how far removed one might be from financial services, it must be accepted that this industry plays an intrinsically important part in our lives and the way we live them. Small businesses have established here to service the growing population that has been the result of this thriving industry. Looking at that trickle-down effect, a picture of what Cayman might look like without financial services is quite grim indeed. It is in all of our interests to ensure that Cayman remains well-placed to compete on the international stage for decades to come, by encouraging the development of existing labour-intensive service provider businesses such as fund administration and by welcoming new areas of business, such as fund management and broker dealers. A flush of new business will provide Cayman with employment opportunities that will invigorate the health of this economy.

Continued support of Cayman Finance will be crucial to its ability to maintain the level of active engagement going forward. For more information on becoming a member of Cayman Finance, contact Denise Gower.


Cayman Finance board representatives