CEO blog: November Notes
By Jack Inglis, CEO, AIMA
Published: 23 November 2017
The so-called Paradise Papers cast scrutiny once again on offshore jurisdictions with suggestions of improper tax behaviour. Again some of the media frenzy was based on a complete lack of understanding as to how these jurisdictions operate. When the Queen’s name got dragged into it some journalists looked to become better informed and we were able to help them with our existing briefing note (here) of these fully transparent and tax neutral fund domiciles. As a result we saw some more balanced reporting as it became clear that most savers have, in some way or other (typically through their pensions), money invested that way. So, move along, nothing to see here – investors are not avoiding tax and these jurisdictions play an important role in helping channel savings into capital formation around the world.
However this comes at a time when the European Council is preparing to blacklist up to a possible 53 countries as non-cooperative tax havens. The political climate is such that it is highly possible we find jurisdictions with established records of cooperation and compliance such as the Cayman Islands and Bermuda on the list. We think this would be unfair and arbitrary. It is hard to understand how most of the offshore jurisdictions do anything different from a tax and transparency perspective than a number of onshore ones. Most of them comply with all sorts of tax information exchange agreements (FATCA, CRS) with the EU and US. Representations are being made at the highest levels to ensure these offshore jurisdictions are treated fairly and not listed unnecessarily.
Away from that, I was in Washington last week with my colleague Jiri Krol and AIMA’s Chairman, Simon Lorne of Millennium Management. We had the opportunity to meet individually with SEC Chairman Jay Clayton and Commissioners Michael Piwowar and Kara Stein. Our agenda was to discuss greater harmonisation between SEC and CFTC registration and reporting as well as the work IOSCO is doing on defining and measuring leverage as used by funds. We were extremely encouraged by the meetings and found Chairman Clayton to have a profound understanding of the issues and a very constructive approach towards encouraging capital formation through smart regulation.
I was unable to make it to Singapore for AIMA’s annual forum there earlier this month but a number of my colleagues attended and reported that we had our largest ever audience for an event in the country. Of note was a speech by the MAS promoting the domicile with the new fund vehicle, the Singapore Variable Capital Company (S-VACC) , which can be used for alternative strategies and which is hoped will be a game-changer for asset management in the region.
Finally we welcomed Jennifer Wood back to the London office after a month on the road. Jennifer has toured the world presenting AIMA’s new modular DDQ to members and at the same time has hosted seminars guiding managers through the myriad of complex private placement regimes for fund distribution. Both topics drew large audiences and we encourage follow-up questions by phone. Jennifer is American so she deserves Thanksgiving Day off. In fact, Happy Thanksgiving to all our US members.