Cayman Islands Monetary Authority Advises Banks Against Promoting Confidentiality

Caymannetnews

25 January 2001

This story is reproduced by kind permission of Caymannetnews at: http://www.caymannetnews.com/

Banks operating in the Cayman Islands have been instructed by the Monetary Authority not to promote themselves "exclusively or primarily on confidentiality or secrecy," in keeping with a directive from the Governor in Council.

The new regulation, " in exercise of the powers conferred by section 29 of the Monetary Authority Law (2000 Revision)" directs the Cayman Islands Monetary Authority to "advise all regulated service providers that aggressive marketing polices based exclusively or primarily on confidentiality or secrecy are not in the national public interest and shouldn't be pursued."

Banking experts say this is nothing new and that as early as 1997, the Financial Secretary's Office and the Office of Marketing and Promotion had communicated to the members of the local banking industry that using terminology.

Speaking of the regulation, Mrs. Janice Hummel, vice president of marketing at Cayman National Corportation, noted that, "for many years the Cayman Islands financial industry has advertised the jurisdiction as a well-regulated financial centre with first class service providers. The new laws and regulations will serve to enhance this reputation. Cayman National has always advertised its services and accepted business with this in mind and we will continue this policy," she said.

Mr. Jim O'Neill, manager of Bank Austria Cayman Islands (BACI) said, "BACI already works with the Cayman Islands Monetary Authority in this regard and we do not depend on aggressive advertising to develop business."

Additionally, banking sources say that while they have experienced some down-turn in business, they are seeing more transactions from large institutions and corporations, which is not necessarily a negative development.

"I believe the general consensus is that we are going to experience a slow down, but we are not worried to a great extent. In the past where we had received business from individuals, we are now seeing more business from institutions, and corporate customers. And in a way this will be more profitable for us in the long run because of the higher fees and it is less labour intensified," stated one source within the bank community that did not wish to be named.

Arin Smith manager, development at CIBC Bank and Trust Company said that CIBC had had no adverse effects; rather the opposite, he noted.

"We are not expecting any down-turn in the business. We have seen a reduction in enquires that we would not have accepted and we are not interested in that business," he explained.

Nevertheless, industry sources say, that some of the islands' banks are looking to diversify their market, and not just because of the "harmful tax initiatives of the Organisation for Economic Cooperation and Development (OECD) and the Financial Action Task Force (FATF).

They are targeting non-traditional markets like Japan, South and Central American , which they formerly avoided due to the language barrier. As the Cayman Islands' workforce becomes more diversified, the sources say, language is no longer a problem.

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