Transparency Initiatives in the Cayman Islands

Mr. Dax Basdeo, PhD Chief OfficerMinistry for Financial ServicesCayman Islands Government

20th June 2016

Overview

• Transparency – Principles vs. Mechanisms• Principles– Adequacy– Accuracy– Timeliness

• Mechanisms– Issues for debate and discussion

Cayman’s Commitments

• 36 TIEAs• Multilateral Convention on Mutual

Administrative Assistance in Tax Matters • US FATCA• UK FATCA• OECD’s Common Reporting Standard• EOI for Beneficial Ownership with the UK*• Initiative for Automatic EOI for BO

Beneficial Ownership Transparency

• FATF 24: Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities

• G20: improve implementation, including availability and exchange

• “[A public] registry itself is not a solution if it is not properly fed with information” – Pascal Saint-Amans

Cayman Model for BO EOI

TCSP

LCA FCA

FCA

FCA

FCA

LCA

LCA

LCALegal Entity Gov’t Register

Competent Authorities- Tax- Regulatory- Law Enforcement- Fin. Intelligence Unit

Local Foreign

Trust and Corp Services

Providers

BO EOI - Adequacy

TCSP

LCA FCA

FCA

FCA

FCA

LCA

LCA

LCA

• Basic info, BO info• Types of entities• Exemptions• Threshold for disclosure

Cayman: • Retrospective due diligence• 10% vs. 25% Int’l Standard• Abolished bearer shares

BO EOI - Accuracy

TCSP

LCA FCA

FCA

FCA

FCA

LCA

LCA

LCAverification consistency

query specification

Cayman: • Regulatory sanctions incentivise TCSPs• Strengthening DNFBPs• Guidance to FCAs

BO EOI – Timeliness

TCSP

LCA FCA

FCA

FCA

FCA

LCA

LCA

LCAtimely updating

• disclosure rules• turnaround time• on request; automatic; spontaneous

Cayman: • Confidential Information Disclosure Law• Tightening eligible introducer regime – 1 week• Electronic reporting platform – < 24hrs

Need for further debate…

• Privacy vs. Secrecy– Cultural acceptance– Personal security– Fair Treatment

• Due Process• Speed of change– Inclusiveness vs. exclusiveness – Uniformity

• Data security