WEST PALM BEACH, FL (HEDGECO.NET) – With the current growing interest on the part of European investors in hedge fund investments, some European financial centers such as Luxembourg, Jersey andDublin are attempting to woo hedge funds back onshore. Such efforts will ultimately be a challenge to many popular offshore financial centers in the Caribbean such as the Cayman Islands and theBahamas.
For sometime, the Bahamas has been introducing further reforms in developing the Bahamian offshore financial service centers, with the aim of transforming such centers into full and competitive �Financial Center� the ultimate objective of such effort is to compete with the onshore financial centers of the US and UK.
According to a Cayman Islands based law firm, Maples & Calder, efforts made by some European financial centers to bring hedge funds back onshore are not likely to succeed. According to Gray Smith, a partner at the law firm, �Cayman rules are simple and flexible, there are no restrictions on investments, and investors are free to decide what they want to invest in. The legislation is geared up for people who can look after themselves.�
According to published news reports, about 80% of the global hedge fund companies are registered with the Cayman Islands Monetary Authority, the government agency charged with the registration of hedge funds and mutual funds conducting business in such jurisdictions. The Cayman Islands has significant support functions for hedge fund operations, such as back office protocols including accounting and legal expertise needed for the smooth running of offshore funds. There is also the added factor that the Caribbean jurisdictions have little, if any regulatory oversights for the offshore fund establishments.
Speaking to the Bahamian Parliament, Maynard-Gibson addressing the issue of the Bahamian financial offshore status once said, �We are blue chip, well regulated and cooperative, we are not and will not be a center where ill-gotten gains may be hidden�. The Bahamas has lately been credited and in fact won praises for its cooperative attitude in reforming its laws and regulations governing its buoyant offshore industry. The country has met the key requirements of the OECD relating to the harmful tax initiatives, and has shown increased willingness to help in the international campaign against money laundering, tax evasion and the fight against the financial web of terrorist financial infrastructure.
Currently, the regulatory agencies in the United States, the SEC, and the FSA of the United Kingdom seem to be preoccupied with the question of regulating the activities of hedge funds. Such reforms, when handed down, could actually exacerbate the offshore relocation of hedge funds to the advantage of the Caribbean tax havens with minimal regulatory oversight.
Paul Oranika
Editor-in-Chief
HedgeCo.Net
Email: [email protected]
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds!
Be sure to check out our sister sites. www.hedgefundlounge.com, www.hedgefundtools.com, and www.hedgefundemployment.com.
