Cayman Finance chairman Travers laid out ways in which Cayman is likely to meet any equivalency criteria stipulated by the directive. He said Cayman had full membership of IOSCO and expected "all Cayman Islands regulated funds to operate on the basis of full transparency".
The Cayman Islands has intervened in the debate over the EU's alternative investment fund managers (AIFM) directive, in an attempt to press the jurisdiction's case for a European passport.
Cayman Finance chairman Anthony Travers wrote to the EU parliament's rapporteur on the directive, Jean-Paul Gauzès, laying out the ways in which the Cayman Islands already meets or exceeds regulatory and transparency requirements for hedge funds jurisdictions.
Travers said he had the impression "there may exist a misunderstanding about the nature of the transparency which exists in relation to the Cayman Islands hedge funds industry and the manner in which Cayman Islands hedge funds operate."
He told Gauzès: "The Cayman Islands financial services industry operates to access and pool funds from the international capital markets and directs those funds into investment opportunities in G20 jurisdictions.
"Whilst in terms of AUM [assets under management] the favoured locations for investment managers of Cayman funds are the United States and Asia, the Cayman Islands industry would welcome any opportunity to establish with you a regime that would enable European Union based fund managers to continue to benefit from investment by Cayman Islands investment vehicles."
In the letter Travers laid out ways in which Cayman is likely to meet any equivalency criteria stipulated by the directive. He said Cayman had full membership of the International Organisation of Securities Commissions (Iosco) and expected "all Cayman Islands regulated funds to operate on the basis of full transparency".
He added that unlike a number of EU jurisdictions the Cayman Islands opted for full pro-active tax reporting for all EU residents when it signed the EU Savings Directive in 2003 and has fulfilled criteria to meet EU equivalency on the directive.
The jurisdiction also signed or was negotiating a number of tax information exchange agreements with EU member states. Cayman has already signed 16 tax information exchange agreements (TIEAs), over and above the OECD critera for inclusion on the 'white list' of compliant countries.
Travers also noted Cayman's anti-money laundering legislation was found to be superior to most EU jurisdictions under International Monetary Fund and Financial Action Task Force evaluations.
He said there was no objection to EU institutions establishing operations and trading from the Cayman Islands.
He said the directive still had a considerable number of flaws that would impact negatively on EU investors, while managers based outside the EU would still use Cayman as a funds domicile.
The EU council is also due to vote on its version of the legislation on May 18.
© Hedgeweek
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