Cayman Islands Financial Services Industry Grew In 2004

by Amanda Banks, Tax-News.com, London

28 January 2005

The Cayman Islands Monetary Authority has announced continued growth in the jurisdiction's financial services industry in 2004, which it says was driven by strong interest from the fund and captive insurance sectors.

According to CIMA, funds domiciled in the jurisdiction as at December 31, 2004 increased by 25% over the year to nearly 6,000, and the number of new captives increased by 75 to 693 at year-end, a 7% net increase.

Banking and fiduciary services also performed well, with total year-end footings of licensed banks projected at over US$1 trillion.

Announcing its 2005 policy objectives, CIMA pledged to continue improving its risk-based approach to supervision, and to enhance the regulatory regime where needed and appropriate.

In addition, the Authority will partner with the private sector in working groups to assess the Insurance Law and Regulations, fees for trust companies and company managers, and how to best mitigate the risks to the jurisdiction from unregulated entities.

Workshops will be held to increase industry awareness of the Basel II measures and the implications for Cayman licensees, while a comprehensive review of the domestic insurance industry will commence in the second half of 2005, once the impact of Ivan can be properly assessed.

On the international front, the Authority anticipates final publication of the International Monetary Fund’s (IMF) assessment in February.

It will also actively pursue membership of the International Organization of Securities Commissions (IOSCO) and the completion of Memoranda of Understanding with qualified regulators.

CIMA Chairman Mr. Timothy Ridley observed that:

“We are very encouraged to see the impressive growth of these two sectors of international business in 2004, despite the unforeseen burdens imposed by hurricane Ivan. Our service providers and their client base remain committed to the jurisdiction as evidenced by the strong licensing and registration activity in the final quarter.”

Mr Ridley added:

“The Authority will continue to liaise very closely with the local banking and insurance industries as they work through the difficulties of the post-Ivan recovery of the Islands.”

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