Central public register may be inevitable

| 14/12/2015 | 1 Comment

Beneficial Ownership2(CNS Business): If public central registers become the global standard for access to beneficial ownership of commercial and financial entities then Cayman will inevitably have one as well, but the Cayman Islands will not go out on a limb and be the first, Financial Services Minister Wayne Panton has said. Cayman is now examining a centralised platform, which will not be public, as a means of meeting the current international standards and satisfying the latest demands, he added.

The minister said that protecting people’s privacy remained important, but as a jurisdiction that has prided itself on being at the forefront of setting international standards for the global financial system, Cayman would continue to comply with acceptable international standards.

If the global standard becomes a central register with public access, he said, “then Cayman will have a public register” but not until everyone is in that position and there is a level playing field. The government would not arbitrarily implement any system that would override the right to or lead to an undue invasion of privacy and “go out on a limb on our own” because that would “kill legitimate business”, he said.

Panton said he did not know if that was inevitable or not but the perception that a public register would fix the issues that are faced by the global economy was misguided. He said the world is full regulations and laws that were supposed to cure all ills but turned out not to because more often than not, expectations and regulation did not match reality.

“Not all information is relevant to everyone,” he explained.

Despite a line in the sand on public access, given the pressure to conform to the latest global demands over information, experts in Panton’s ministry will be working on a technological system to provide the relevant authorities access to the beneficial ownership information they need without undermining privacy issues.

The minister noted that to prevent potential wrongdoers being tipped off, law enforcement agencies would be able to access information during criminal investigations without the owners being aware of it.

Explaining the evolving landscape of international financial regulation at a recent media roundtable, Panton outlined some of the ongoing challenges that Cayman continues to face regarding the offshore financial services industry. He said the challenges still arise because of misconceptions about what happens in the sector in Cayman and the changing goalposts when it comes to the exchange of information on the two specific but different areas of criminal conduct and tax evasion.

Cayman has been under pressure for some time now to introduce a central public register that would allow almost anyone to access a database that would contain information about who really profits from any given financial entity registered here.

Panton explained that a public register is a step way too far and the industry and government were working on a technological solution that would allow certain authorities access to the information already held in Cayman, without having to hold the data in one specific place, suggesting it would work like CORIS, the central registry’s search system, but in reverse.

Panton said the idea was to create a system that would allow searches via a centralised platform to where the data required is actually held without forcing industry stakeholders to file information in one central place. Instead, the system would be able to access the relevant information wherever it is held when needed.

Panton said he did not think the emergence of the beneficial ownership issue was a threat to Cayman’s financial sector but it would have an impact.

“We have a good reputation for being a jurisdiction of engaging and setting standards. We don’t see this as a threat but it means added costs for everyone,” he said, noting that the main goal now was to ensure consistency in implementation across jurisdictions competing in the financial industry.

Currently discussing the issue with stakeholders, the minister said the idea of a centralised platform would be far preferable to any form of central register but would satisfy the latest demands for access and ensure Cayman remains compliant and at the forefront of the standards expected on the global financial stage.

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Category: Finance, Financial Services

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  1. Anonymous says:

    Caymanians had better start preparing for the days when they have to rely on tourism alone for their survival as the offshore industry will one day be a thing of the past.

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