Michelle Carroll, Partner, Investment Management Division, BDO LLP on the changes to the disclosure of funds and directors in the Cayman Islands…

CIMA's public consultation is a welcome step forward as it should help reduce the misconceptions some investors and politicians have over the Island's legitimacy as a global hedge fund centre.  Having said that, no one should invest in a fund aimed at sophisticated investors without first going through a thorough due diligence process which should include interrogation of the competency of the fund's directors.  These directors are not hard to find and, in my experience, are very happy to meet and talk through their policies and procedures.  If you don’t like their answers or can’t get hold of them, you shouldn’t invest, regardless of whether they are authorised by CIMA.

Cayman has a challenge which it is vital to meet in order to ensure that it continues to be a global hedge fund centre. CIMA's consultation should produce some useful recommendations which,  I’m sure, CIMA will adopt.  The key to its success though will be making sure that those changes made are credible because if the market suspect they are just a whitewash, then the Cayman Islands will become a less attractive place to do business.