As published on caymannewsservice.com, Tuesday 27 October, 2020.
(CNS): Comments sent to the Ministry of Financial Services by the Cayman Islands Company Managers Association indicate that a batch of bills being circulated to provide more accounting oversight are completely unnecessary and will lead to a loss of business. The industry body noted that changes to several financial sector laws are being proposed because of a OECD global report on tax issues, but noted that the report found that Cayman was already 100% compliant.
“One would have thought that an effectiveness percentage of 100% would rank fairly high on the effectiveness scale,” CICMA stated in its collective written submissions.
The association represents more than three dozen corporate service firms whose business is governed by the legislation surrounding company management and will be the most, though not the only, offshore industry players that would be impacted by the latest rule changes.
In its submissions about the amendments to the bills, CICMA said that the proposed raft of changes would impose even more burdens on stakeholders in financial services at a time when there have been a significant number of additional obligations placed on the industry while it is also battling the COVID-19 pandemic.
And CICMA said these changes are totally unnecessary. Referring to the proposed requirement in the law to increase existing reporting from annually to twice yearly, the association said, “In our opinion, Cayman will lose more companies as a result of this added obligation.”
Some of the new proposed changes are not only unnecessary but also difficult to do and even harder to charge for, which would increase their work load without any prospect of remuneration, CICMA said. These types of changes, which are not necessary because the system is not broken, “drive a wedge” between corporate service providers here and their clients, the industry stakeholders noted.
“In our opinion, the price of trying to fix what ain’t broken is too high for corporate service providers who are already reeling from the various impositions in this year of Covid-19,” CICMA added.
The submission to the ministry said that while the Global Forum Report may have made recommendations for more oversight of accounting information, the very same report found that the regime here was already 100% effective. Therefore, the government should resist further obligations.
However, foreseeing that government is likely to ignore their concerns and press on anyway, the CICMA asked that, if these new requirements are to be imposed, the government at the very least waits until the end of next year before implementing them.