LB144 p66-75

Offshore focus: Bermuda, BVI, Cayman, Guernsey and Jersey

May 2004 Legal Business 67

Continental driftThe recent offshore law firm

mergers have re-ignited the

debate surrounding the need for

multi-jurisdictional capability.

Legal Business analyses the

arguments for and against

MAIREAD KEOHANE AND ALAN LAMB

IT WAS ONLY A MATTER OF TIME. THATtime has now come. On 2 February 2004, thefight for supremacy in the offshore legalmarket moved into round two. The merger ofJersey-based Ogier & Le Masurier withCayman Islands firm Boxalls re-drew thebattle lines, producing the first transatlanticoffshore practice.

The resultant 370-strong Ogier & Boxalls,as the firm will be known in the CaymanIslands, is the first practice to span theleading European and Caribbean offshoremarkets of Guernsey, Jersey and Cayman.While multi-jurisdictional capability is notnew to the offshore world – Conyers Dill &Pearman and Maples and Calder, amongothers, have expertise beyond their homebases – the merger will have some askingwhether organic growth is enough. Certainly,rumours abound that the other leadingCaribbean firms are soon to roll out plans formajor European expansion. ‘Each time ithappens, the merger idea moves back up afew notches on partners’ agendas,’ Ozannespartner Robert Shepherd acknowledges.

TrendsetterIt’s no great surprise that Ogier is pioneer-ing this development: the firm was also thefirst from Jersey to expand into Guernsey in1999 and then set up in London in 2003.

Ogier chairman Jonathan White believesthe link-up marks a tellling sign of the

times. ‘This merger marks ashift, as those doing inter-national work have come torealise that if they are going todo it and do it well, they needto be bigger and to provide thein-depth services the very largeLondon and New York firmsexpect of them,’ he explains.‘We need to be able to provideservices in more than one jurisdiction.’

The Ogier move wasfollowed last month by themerger of Bermuda-basedAppleby Spurling & Kempe withCayman firm Hunter & Hunter,to create Appleby SpurlingHunter. For Appleby groupmanaging partner PeterBubenzer, the thinking wassimple. ‘We had good experi-ence and a good reputation inBermuda, and we thought wecould leverage off that in otherjurisdictions,’ he says. The firmhad previously operated referralrelationships, but as Bubenzernotes: ‘Those were neveradequate for our purposesbecause there wasn’t fullbusiness integration.’ Followingon from the move in Cayman, >

LB144 Offshore p66-75 26/4/04 6:37 pm Page 67

achieve a competitive advantage to providethe highest quality out of the leadingoffshore centres.’

The clients we spoke to predictablydownplayed multi-jurisdictional capabilityas a major factor in choosing a legal adviser.As one puts it: ‘Am I more drawn to a firmbecause they span more than one jurisdic-tion? No.’ That’s the typical response, butclients certainly don’t see it as a negativeand can see the potential benefits in havingpeople they know and trust across severaljurisdictions.

Ultimately, however, clients believe thatit’s a business decision for the law firms;most think that it makes sense. As Appleby’sBubenzer explains: ‘In business you want tohedge your own risk by spreading yourbusiness sources and diversifying.’

The experience so far has been encourag-ing. Ogier & Boxalls partner Peter Cockhillis in no doubt that the merger has broughtnew opportunities, and points to thenumber of shared clients that Ogier represents in Europe and Boxalls handlesout of North America. ‘There are definiteopportunities to cross-fertilise,’ he says.

A firm of two halvesWhile publicised as mergers, the tie-ups fallshort of what lawyers understand a full law

it right now,’ heexplains. ‘But it is inthat the underlyingintention is toprovide a completeservice to majorclients with diverseneeds.’ He goes on:‘If a client inLondon gets a goodservice fromWalkers in Caymanbecause the firmcompetes locally onexpertise, experi-ence and quality ofservice, and uses,say, Mourant inJersey for the samereasons, then acombined entitymay make sense.’

In responding tothe question as towhether this is aclient-led move,Ogier’s Jonathan White saysthat drawing a clear linebetween what is client-led andwhat is business development isdifficult. ‘We are constantlylooking at clients and trying todetermine how best we canserve them and build thebusiness,’ he says. ‘Clients andbusiness development are bothcritical to our strategy – the best way to create new businessis to build on and enhanceexisting business, but also to

68 Legal Business May 2004

Offshore focus

Appleby will also now set up its ownpractice in the British Virgin Islands; thefirm had previously enjoyed an associationwith leading BVI firm, Harneys.

The mergers have elicited strong viewsfrom competitor firms, with several seniorlawyers, notably in the Channel Islands,questioning the business rationale for themove. Jersey-based Bailhache Labessepartner Mark Lewis sums up this side of theargument. ‘My own feeling,’ he says, ‘basedon our own research, is that at least inrelation to legal services, there is no greatdemand for tie-ups at the moment.’

It is a view shared by Bedell Cristin’sMichael Richardson, who says that heremains ‘unconvinced that the market islooking for (a) larger, and (b) merged,multi-jurisdictional firms offshore’.

Both are careful not to dismiss cross-border links out of hand, admitting theywill continue to monitor the situation.

Mourant du Feu & Jeune’s head of com-mercial, Tim Herbert, is more positive. ‘Fromthe Jersey perspective, it shows that Jerseylegal services can extend beyond the ChannelIslands,’ he enthuses. ‘That’s quite exciting.’

Across the Atlantic, the response is mixed.Harneys partner Peter Tarn, based in the BVI,comments: ‘I am still fairly sceptical because Ilook at it and say, what does the client getfrom this?’ That said, Tarn thinks it would benaive to believe that the offshore legal marketwill somehow remain immune to the amalga-mations seen within other sectors. ‘Peoplelike the idea of one-stop shopping, and everyother industry sector seems to be predicatedon the idea of some sort of global consolida-tion,’ he says. ‘I can think of reasons why weare different, but the same was probably trueat some stage of industries that now have ahigh degree of consolidation.’

Know your clientDetractors doubt that the mergers areclient-led. ‘If A&O wants to set up an SPV inJersey does it make any difference that thefirm can also advise on Cayman law?’questions Bailhache’s Lewis. That’s a viewshared by Tarn: ‘Clients seldom say to us,“If only you had an office in Cayman.” Thereality is that, if they want to deal with us,they’ll push BVI as the location. If not, theycan use Maples.’

Walkers partner Ian Ashman takes amore measured position. ‘It’s not client-ledin the sense that there’s a huge clamour for

>

‘If you can’t offer clients what they need, they will goelsewhere – you risk losing outto competitors with a broaderreach.’ Chris McKenzie, Smith-Hughes, Raworth & McKenzie

White: merging provides a competitive advantage


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Offshore focus

While some latch on to thefact that these aren’t ‘true’mergers, others are morepragmatic. ‘If the client isgetting the service efficientlyand cost-effectively, it won’tmatter too much to them whatgoes on behind the scenes,’ saysMourant’s Tim Herbert.

Mergers or not, the integra-tion issues remain the same:combined marketing, knowledgemanagement, IT and documentsystems alignment all have to beworked through. Competitorssee this period of bedding downas an opening. As one puts it:‘They are going to take their eyeoff the ball for a time while theydeal with internal issues – that’san opportunity.’

One size fits allFor some, the mergers reflect theevolution of the offshore market.Guernsey-based Ozannes’ deputymanaging partner RobertShepherd observes: ‘The Ogiermerger reflects the strategicdirection most firms have been

firm ‘merger’ to be. Regulations in thevarious jurisdictions preclude the firmsfrom fully integrating the partnerships onthe legal side.

But what would prove a headache for amore traditionally structured firm, is less ofone for the international offshore firms.Offering multi-disciplinary practices allowsfirms to work around the prohibition ofsharing profits with lawyers not qualified inthe same jurisdiction – the hurdle faced byOgier in its deal with Boxalls. The ChannelIslands Bar regulations stipulate thatlawyers may not share profits with lawyersnot qualified in the same jurisdiction. Thereis no such provision in Cayman.

Instead, Ogier & Boxalls will continue tooperate three discrete legal partnerships inJersey, Cayman and Guernsey, with thepartners in each qualified to practise in therelevant jurisdiction. An overarchingstructure combines the fiduciary sides of thetwo businesses into Ogier Group LP, inwhich all partners will be members.

Similarly, Appleby Spurling Hunter hasbeen able to integrate more fully itsfiduciary business than its legal, again dueto Bar regulations. The legal practices inCayman, Bermuda and the BVI will remainas separate entities.

Both acknowledge some frustration withthe regulations. ‘The structure has to fit thevarious regulations,’ says Appleby’sBubenzer. ‘But we would go for full, legalintegration were it an option – it wouldmake the structure simpler.’ Simple it isn’t,and Appleby sought advice on how tostructure the merger.

Ogier’s White, meanwhile, would bekeen to establish a more unified firm. ‘In an ideal world we would like one group and believe it is important to be one group,’ he says. ‘It enables us to treat ourpartners as we wish to treat them andensures that clients receive the best possible service.’

looking at for a number of years. Unlike inthe City, offshore firms not only competeagainst each other but also between jurisdic-tions. We have to sell Guernsey first andOzannes second. Therefore, merger has tradi-tionally been seen as a disadvantage. But forthose who may be concerned about thefuture of their own jurisdiction, it can nowbe seen as hedging the risk.’ On the surface,the idea is simple: if one jurisdiction is goingthrough a slump, offices elsewhere willhopefully make up the shortfall.

But for the firms concluding mergers, thethinking goes further than that. It’s aboutsourcing and keeping more work, becauseyou can cover the jurisdictions where theclient may need advice.

The simple fact is that, as the offshoremarket globalises, so must its serviceproviders. Most lawyers we spoke toacknowledge that traditional distinctionsbetween the major offshore centres are lessmarked than they were. Sure, Bermuda isbest known for insurance, and Cayman mayremain some way ahead on the funds side,but Jersey’s recent introduction of its expertfunds regime is an attempt to claw backsome of the ground it has lost to Caymanover the last decade.

Appleby’s Bubenzer points out: ‘Thejurisdictions are being pushed in the samedirection in terms of disclosure and regula-tion.’ Such pressure comes largely frominternational organisations, which have,over recent years, been highly critical ofstandards offshore. Collas Day partner IanKirk in Guernsey says: ‘Each jurisdictionwill have its own merits, but pressure fromorganisations such as the OECD and theIMF will mean that legislation will apply insome way, shape or form across all the juris-dictions.’ Equally, as the pressure to attractnew business mounts, a good piece of legislation introduced in, say, the BVI maybe copied elsewhere.

A bit partialAccording to Bubenzer, jurisdictionaldiversity brings a greater degree of impar-tiality to the advice as to where to locate atransaction. ‘Before, it was difficult to bedispassionate,’ he says, ‘because if youdidn’t get the mandate in one place, youdidn’t get it at all.’

Holding on to work was a key driverbehind the Ogier move. White explains: ‘Alot of our business comes from international

‘I am still fairly sceptical because I look atmulti-jurisdictional mergers and say, whatdoes the client get from this?’ Peter Tarn, Harneys

Tarn: doubtful about client demand for merged firms

>




Offshore focus

WE USED TO CALL THEM ‘TAX HAVENS’,but not anymore. After a coshing from theOECD, the IMF and other acronyms withpurgative intentions, ‘tax-neutral’ offshorefinancial centres (OFCs), promising tight regu-lation and strong supervision, are emerging.Have the OFCs been treated fairly by the inter-national organisations? Are OFCs now in regu-latory order? And will they prosper? We askedthe experts in the British Virgin Islands,Bermuda, Cayman, Guernsey and Jersey.

The Bermuda Monetary Authority(BMA)’s evangelistic supervisor of insurance,Jeremy Cox, won’t use the OFC acronym.‘There are financial centres, period,’ heinsists. ‘Not offshore centres, not onshorecentres. Financial centres.’ Richard Walker,deputy director of policy and internationalaffairs at Guernsey’s Financial Services Com-mission, refines the point. ‘What Guernseywants to see, and the international financialcommunity is beginning to take this onboard,’ he says, ‘is a distinction between co-operative and unco-operative centres, notonshore and offshore.’

A fair cop?Cox and Walker may be right and, if they are,it’s because regulators of their calibre are nowin post, setting standards and managingchanges to meet international demands. Thisraises the question: have the OECD, the IMFand the major economies been even-handed?After all, the US harbours fragrant Delaware;the EU’s boundaries contain Andorra, Liecht-enstein and Monaco – branded as ‘unco-operative tax havens’ by the OECD asrecently as March 2004. Did our five ‘pink onthe map’ jurisdictions feel victimised?

Probably for diplomatic reasons,responses from regulators were muted. The

brisk ‘Bermuda takes care ofitself’ was synonymous with the‘no comment’ from othercentres. Representatives of pro-motional agencies were franker.John Bridle, chief executive ofGuernsey Finance, thought it‘presumptuous of the OECD tobe preaching when their ownmembers were not compliant’,and that the EU needed to co-operate with ‘well-run, well-regulated OFCs that are goodneighbours’, rather than drivebusiness where regulation isnon-existent. Phil Austin, chief executive of Jersey Financeand an experienced formerbanker, noted a gradualimprovement in onshoretreatment of OFCs, ‘becauseJersey has learnt that it has toengage in the political processwith Western governments toachieve a fair arrangement’.

OFCs have also learned thatco-operation pays off. Jersey,with Guernsey and the Isle ofMan, now negotiates with a ‘levelplaying field’ strategy, using a‘we’ll do it when the Swiss do it’benchmark for the depth andtiming of compliance measures.The three also adopted commontexts for the proposed bilateralagreements and guidance notesfor the EU Savings Directive.Further co-operation among theCrown Dependencies is anticipat-ed but old rivalries linger; anoutsider might perceive

Pressure onthe offshore

law firms. They want to know how tostructure a deal, where to do it, and only thendo they start to decide which firm to use. Soif you create a firm that offers high-qualityservices in more areas, you can potentially beinvolved in those deals at an earlier stage.’

Ogier & Boxalls’ Peter Cockhill admits to‘a Damascene conversion’. He had previous-ly been a proponent of the argument that ifyou were selling an overseas product, youwere selling a jurisdiction, and thereforemulti-jurisdictional expansion was inher-ently conflictual. ‘The game has changed,’he says. ‘What has been proven is that thereis a pre-eminent group of offshore jurisdic-tions, servicing the global financial centresacross various timezones. If you want to bepart of that game, this is the way forward.’

Cayman is the obvious first choice forboth Ogier and Appleby. A considerablevolume of structured funds work is handledin Guernsey and Jersey, but lots of hedgefunds work goes to Cayman, so as White says:‘If we can provide top-quality services acrossall three areas, it makes us stronger overall.’

Chris McKenzie of BVI firm Smith-Hughes, Raworth & McKenzie sees merit inthis argument. ‘Historically, clients wereviewed as your own,’ he says. ‘Now, if youcan’t offer what they need, they will goelsewhere, so you risk losing clients to competitors with a broader reach.’

Planning aheadJersey and Guernsey may be the locations ofchoice for a lot of European business, butthe Caribbean centres do well out of NorthAmerica and increasingly Asia – that’s theHoly Grail. ‘You can’t ignore the fact thathalf of the world’s population lives in thatregion,’ Peter Cockhill says.

As far as Asia is concerned, it is theCaribbean firms that have the first moveradvantage. Appleby, Conyers and Mapleshave all been there for some time. Walkersopened in Hong Kong last year and nowfields a team of four lawyers, offering bothCayman and BVI advice. Asia is clearly onthe minds of many a managing partner. AsOgier’s White confirms: ‘In the next ten tofifteen years, the Far East will be a veryimportant market for everyone. It has tofeature in the thinking of the leading organisations.’

Asian expansion may well prove thatmulti-jurisdictional coverage now is theright move for the future. LB

Financial centres come under scrutiny

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Offshore focus

advantages emerging from a union of Jerseyand Guernsey, but it won’t happen.

Under pressureThe predicament facing the BVI, Bermuda,Cayman, Guernsey and Jersey shouldn’t beunderstated. These are tiny jurisdictions withpart-time legislatures and small administra-tions, dependent on financial services for upto 70% of GDP. The loss of a significant pro-portion of financial business would be cata-strophic. All accepted the realpolitik of inter-national regulation some time ago. In 2002,Robert Mathavious, managing director of theBVI Financial Services Commission (BVIFSC), didn’t mince his words during a speechto the BVI Chamber of Commerce, when hestated: ‘The reality is, the officials and politi-cians in the developed world are gearingtheir efforts to ensuring that all offshorecentres meet international regulatory, super-visory and conduct of business standards.’

Pressure to meet those standards has beenapplied at three distinct but linked levels.First, at a macro level, improvement in thecross-border supervision of financial institu-tions was demanded. This was against apotential prudential risk in OFCs, identifiedby the IMF using 2001/2002 statistics, at$1.8 trillion of cross-border equity, and $1.7trillion of net banking claims; respectivelyabout 14% and 5% of world totals.

Secondly, at a micro level, OFCs wereaccused of facilitating money laundering,fraud and terrorism, which has led to pressurefor the improvement of transparency andKYC (know your customer). Tax evasion haslatterly been brought within this head.

education replaced the ‘blacklist’ approach.Lorna Smith, executive director of the BVIFinance Centre, perceives a helpful ongoingdialogue with the IMF as systems areshaped. A similar pattern of key reformsemerged in the five jurisdictions reviewed:

■ Subject to some legal fine-tuning, all five jurisdictions now offer fully independent regulators.

■ IMF evaluation assessments have encour-aged compliance with international regulatory standards such as the BaselCommittee on Banking Supervision coreprinciples and approved anti-moneylaundering (AML) regimes.

■ Changes to statutes covering regulationof institutions, companies and financialservices have been implemented and arecontinuing.

Finally, ‘harmfultax practice’, hasbeen targeted by theOECD, the EU and,in some cases, theUK and US Trea-suries.

BMA’s Cox identi-fies two dangersfrom concertedinternationalpressure. First, therisk of homogenisa-tion, a ‘one size fitsall’ approach whichleft centres poorlyregulated and undifferentiated.He explains: ‘The cookie cutterapproach is dangerous anddoesn’t accomplish anything.Supervisory regulation must beappropriate to the economy andthe development of the industry.’

The second risk was over-ambition, too much too soon.‘Setting jurisdictional standardsis one thing, getting the rightpeople in place is another,’ Coxsays. ‘We need time to geteveryone engaged in settingstandards for the global market.’

Moving forwardAlthough pressure from the IMFet al has been firm, once co-operation was established,timescales became realistic andpolicies of persuasion and

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‘The cookie cutter approach isdangerous. Supervisoryregulation must be appropriateto the economy and thedevelopment of the industry.’ Jeremy Cox, Bermuda Monetary Authority

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■ More recently, attention has turned to‘product improvement’ legislationwhich improves jurisdiction marketposition.

■ The imposition of the EU Savings TaxDirective is still being finalised and, asmentioned above, there is resistanceuntil unco-operative jurisdictions andSwitzerland fall into line.

The supervisory and regulatory measuresintroduced have generally satisfied theinternational inspectors’ initial reviews,with the proviso that insurance regulationneeds more attention. Jersey and Guernseywere assessed by the IMF in 2002 with sub-stantially positive results. The BVI’s 2003review suggested some detail improvementsbut noted a fundamentally sound system.Bermuda and Cayman await finalisation oftheir 2003 reviews, and have received earlysignals that their structures are working.Tightening-up measures can be expected asregulatory skills improve in the OFCs.

Deep impactOn balance, the regulatory convergence to common standards is being achievedwithout damage to the ‘character’ of

individual jurisdictions. Butwhat impact have the reformshad to date on commercialviability? Regulatory changeshave already been time-consuming and expensive.Guernsey’s Richard Walker seesa continuing process whichrequires a resource commitment‘according to need’ by co-operative jurisdictions: staffingat the BVI FSC will increase by15% during 2004 andBermuda’s Monetary Authorityhas already recruited an actuaryto strengthen insurance compli-ance efforts and is committed tohigh staff recruitment andtraining standards.

Alongside the rising costbase, client confidentiality isdeclining as AML measures takeeffect. Also, onshore centreshave been making regulatory

changes and, according to Phil Austin ofJersey Finance: ‘There’s a drift of retail fundbusiness to Dublin and Luxembourg.’Meanwhile, Vermont has made someinroads into the captive insurance market.There has certainly been some loss of com-petitive edge by OFCs.

But regulation has not had an entirelynegative impact. The jurisdictions recognisethat quality business will now go onlywhere regulation is strong. MarciaWoolridge-Allwood, deputy director ofbanking, trust and investment at the BMA,neatly summarises the regulatory challenge:‘We need to be responsive to marketswithout compromising supervisorystandards, and that can only be achieved byestablishing a close relationship with ourfinancial industries.’ This close workingrelationship is proving effective. In Jersey,the new expert funds regime is the productof close co-operation between the industryand the regulators; the same model hasemerged in other centres.

There is no sign yet of a major loss ofbusiness in any of the centres we reviewedas a result of tighter regulation; most report


Regulator BVI Financial Services Commission (BVI FSC)Time zone GMT -4 hoursMain geographical markets North America and EuropeKey product markets International businesscompanies; trust and private client wealth management;captive and protected cell insurance.Main competitors Cayman, Jersey, Guernsey. Insurance: Bermuda.IMF evaluation statusAssessed 2003 – published 2004. Primary legislation provides adequate support to FSC.Professional and dedicated FSC staff but more needed.Some criticism of on-site inspection for supervisorypurposes.Selling points ‘A common sense regime with a lighttouch. One that balances effective regulation withcommerciality and the need for financial competitiveness.’Lorna Smith, BVI Finance CentreRecent regulatory changesThe International Business Companies Act 2003‘immobilises’ bearer shares from 31 December 2004. Virgin Islands Special Trusts Act 2003 – VISTA Trustsoutside usual constraints on trustees.Future regulatory changesThe BVI FSC is taking over insolvency regulation to createa ‘creditor-friendly’ regime. The amalgamated CompaniesAct will create single class of BVI company.

BRITISH VIRGIN ISLANDS

Regulator Cayman Islands Monetary Authority (CIMA)Time zone GMT -5 hoursMain geographical markets North America and EuropeKey product markets Banking; funds, includinghedge funds; trusts and private client wealthmanagement; captive insurance with niche in healthcare captives.Main competitors Funds: Jersey, Guernsey,Switzerland, Luxembourg Insurance: Bermuda, Guernsey,Isle of Man, VermontIMF evaluation statusAssessed 2003 – results expected mid-2004. Initialfinding is of a developed compliance culture.Selling points ‘The fifth-largest financial centre in theworld with a well-developed infrastructure that offers abroad range of financial products.’ Cindy Scotland,Cayman Islands Monetary AuthorityRecent regulatory changesIndependent CIMA fully operational from March 2003.Future regulatory changesTask forces are looking at regulation in banking,insurance, investments and securities, and fiduciaryservices, as well as associated CIMA staffing. A mutualfunds consultation paper is due this month.

THE CAYMAN ISLANDS

Regulator Bermuda Monetary Authority (BMA)Time zone GMT -4 hoursMain geographical markets North AmericaKey product markets Captive and protected cellinsurance, particularly catastrophic property reinsurance;trusts and collective investment funds.Main competitors Guernsey, Cayman, Isle of Man, VermontIMF evaluation status Assessed 2003 – results awaited.Selling points ‘The successful Bermuda model willcontinue to offer creative and innovative solutions in the captive insurance market.’ Jeremy Cox, BMARecent regulatory changesThe Investment Business Act 2003, effective January2004, brings Bermuda into line with internationalstandards for licensed investment business.Future regulatory changesThe BMA has proposed a new primary statute to regulatepooled funds, including a licensing system for fundmanagers, with a ‘lighter touch’ for institutions. Expectedto be effective by late 2004.

BERMUDA

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healthy flows of new work. However, thereare reports of consolidation amongstfinancial service providers. Cindy Scotland,managing director of the Cayman IslandsMonetary Authority, reports a fall inbanking activity and some licence shrinkage as global restructuring takesplace. This is confirmed in Jersey and

Guernsey with bank consolida-tion, as major players haveopted for a single ChannelIslands base. Jersey Finance’sAustin estimates that about aquarter of the trust service

providers on the island have merged, closedor migrated, but notes that the ‘bottom tier’has been lost and overall quality in thesector has improved.

Survival of the fittestOur research tends to confirm the findingsin PricewaterhouseCoopers’ ‘Global PrivateBanking/Wealth Management Survey 2003’.It states: ‘Wealth managers will continue toconsolidate their operations and reduce thenumber of offshore centres in which theyoperate to one key centre in each region…wealth managers should expect the numberof offshore centres to decline from thecurrent level of well over 50. Some 20 or 30may be sustainable in the future.’

The five centres reviewed here are likely to be OFC survivors in the first round of consolidation. They each offersolid infrastructure, niche expertise andhigh-quality service. In the longer term,there are risks. Further regional concentra-tion is likely and the time-zone advantagesoffered by Dubai and Singapore may attract a bigger proportion of MiddleEastern and Far Eastern business. But thebest chance of survival these top-tier juris-dictions have is to continue the strategiesadopted: to offer adaptable centres of excel-lence, build on existing skills and developnew products with the encouragement andsupport of regulators. LB

[email protected]@legalease.co.uk


Offshore focus

Regulator Guernsey Financial Services CommissionTime zone GMT/BSTMain geographical markets UK, Hong Kong and Far East, and Middle EastKey product markets Funds, captive and protected cell insurance.Main competitors Funds: Jersey, Switzerland,Luxembourg, Ireland. Insurance: Bermuda, Cayman, Isle of Man.IMF evaluation statusAssessed 2002, published 2003. Commended forcomprehensive regulatory framework and level ofinternational co-operation.Selling points ‘The leading European domicile forcaptive insurance.’ ‘Robust and sophisticated fiduciarylegislation.’ John Bridle, Guernsey FinanceRecent regulatory changesMarket abuse law; tougher banking and fiduciaryregulation allowing prohibition of named individuals.Future regulatory changesThis year sees consultative papers on company law reformand the creation of a financial services ombudsman.

GUERNSEY

Regulator Jersey Financial Services CommissionTime zone GMT/BSTMain geographical markets UK, Hong Kong and Far East, Middle East and South AfricaKey product markets Private client wealth management; banking; funds; SPVs;securitisation; and employee benefit schemes.Main competitors Banking: Switzerland. Funds: Ireland, Guernsey, Luxembourg and Cayman.IMF evaluation statusAssessed 2002, published 2003. Commended for financialregulatory and supervisory system. Selling points ‘The breadth and depth of financialservices, experience and knowledge of the workforce, andJersey’s ability to innovate to meet specialist niche marketrequirements.’ Phil Austin, Jersey FinanceRecent regulatory changesExpert funds regime for high-net-worth individuals andinstitutions, with fast-track approval from March 2004.Future regulatory changesExtensions are being made to legislation coveringinstitutional inspection backed by monetary fines foradministrative breaches. There will be consolidation of allregulatory legislation.

JERSEY

■ Asset finance

■ Banking

■ Capital markets & structured finance

■ Corporate

■ Insurance

■ Investment funds

■ Litigation

■ Insolvency & corporate recovery

■ Regulatory

■ Real estate

■ Trusts

Contacts: Ian Ashman, Mark Lewis,

Wayne Panton, Grant Stein, Jonathan Tonge,

David Whittome, Angus Foster, Guy Locke,

Diarmad Murray, Frank Banks, Iain McMurdo,

Heather Bestwick, Sara Collins-Francis

Offices:

Walkers: Cayman Islands, British Virgin Islands,

Hong Kong, London

Walkers SPV Limited: Cayman Islands, Tokyo

Number of lawyers: 75

Website: www.walkers.com.ky

Walker House, PO Box 265GT, Mary StreetGeorge Town, Grand Cayman, Cayman Islands Tel (+ 345) 949 0100 Fax: (+1 345) 949 7886

WALKERS


Documents

LB144 p66-75