Street.Com – Financial authorities on the Cayman Islands are promising a legislative crackdown to bolster investor confidence in the post-Madoff era. But while the Caymans — long a hedge fund haven due to tax advantages and light regulation — may push for tighter oversight, experts predict they will not lose their status as hedge funds’ offshore crown jewel.

The Caymans have been touted in recent years as the "centre of choice" for hedge funds by Walkers, a major offshore law firm, as well as other service providers for several investor-friendly reasons.

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Tags: cayman islands, caymans, crackdown, crown jewel, financial authorities, investor-confidence, offshore law firm, oversight, service-providers, walkers

RightSide Advisors- Nimbleness and creativity are qualities rarely ascribed either to America’s financial regulators or to Congress. Perhaps that is one reason why both groups continue to fumble over how to deal with hedge funds, which typically exhibit both in abundance. These lightly regulated pools of private capital employ an array of complex trades, frequently shifting strategies and, in theory, generating above-average returns.

The argument for more regulation is twofold. First, nowadays it is not only a few aficionados of the investment world who are exposed to them but a growing number of people—either directly, if they are rich enough, or through their pension funds. Secondly, some hedge funds are so large that a big one’s failure could threaten the financial system.

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