From Features

The Flight to Quality

As featured in the IFC Economic Report Winter 2017/18

For wealth management professionals globally, the flight to quality has been a clearly palpable phenomenon. Yet, the fact is that most international finance centres are already well regulated and have been for quite a number of years.

A scan of the Global Forum's November 2017 tax transparency and compliance review of 119 jurisdictions provides evidence of this. In spite of the Paradise Papers media frenzy, news targets such as Jersey, the Isle of Man and Ireland lead the ratings, outshining larger states that lithely slip the journalists' censure. As will be seen on the following pages, commitment to improving regulation, transparency and compliance isn't always enough - most, if not all offshore centres are keen to observe the rule of law, however, too often, new regulation imposes uncertainty and perhaps unnecessary layers of complexity. 


Offshore Faces Push to Demonstrate Credibility

Jonathon Clifton

Regulation is a leading cause of uncertainty within the offshore industry, amid downward pressure from FATCA, the OECD’s Common Reporting Standard and BEPS, the EU’s AIFMD, and the UN’s Anti-Money Laundering Convention.

The global landscape for the offshore industry has changed dramatically in the past year. Levels of uncertainty are at an all-time high and the world has undergone significant geopolitical and economic shifts. This includes uncertainty about the global economy, immigration, terrorism, Russia’s reported interference in the US election, the Chinese economy, and the stability of the EU. This volatility is challenging the momentum of globalisation, and is also impacting the public appetite for cross border asset flows.

The unexpected results in the US election and the Brexit referendum demonstrate large-scale unease with the status quo and a concurrent rise of a more populist, protectionist, anti-globalisation and anti-offshore attitude. This shift is unsettling for an industry that relies on the robustness of globalisation. This year’s ‘Vistra 2020’ survey of almost 600 corporate services executives found that 71 per cent consider globalisation to be at least somewhat under threat. This …

The Big Debate

Should There be a Mandatory Register of Beneficial Ownership of Corporate Structures in Every Country?

Featuring Comment from Amy Bryant, Judith Sargentini, Paolo Panico, Zosia Sztykowski, Jason Allison and Lucy Frew.

Jurisdiction in Focus

Cayman: Creating the Optimal Climate for Investors

Jude Scott
Cayman Finance

Jude Scott discusses Cayman’s drive to create the best investment climate for investors, to lead in compliance and transparency and to remain innovative in FinTech.

Increased scrutiny of international financial centres in recent years and ongoing pressure to produce solid returns have led institutional investors to make important decisions about where to best direct their investment resources.

Investors are actively searching for unparalleled access to pooled capital to pursue the best investment opportunities combined with a jurisdiction that adheres to the highest legal, regulatory and tax standards. This pursuit has created what is known as a ‘flight to quality’ – investors gravitating to jurisdictions that offer the best investment climate in the most rigorous compliance environment. That flight to quality is increasingly drawing those institutional investors to the Cayman Islands.

The Global Financial Centres Index (GFCI 22) reflected the trend this year with its ranking of the Cayman Islands as the 31st best financial centre in the world, out of 108 jurisdictions in total.  Cayman’s ranking was the second highest among all UK Overseas Terr…