Soon to be introduced changes to the insolvency legislation in the Cayman Islands have been welcomed by the Cayman Islands Financial Services Association (CIFSA).
The changes will be implemented within the next year, whilst a new Insolvency Rules Committee develops a framework of rules and regulations to give practical effect to the changes. The industry has been quick to outline how these changes improve an already successful and respected formula.
“These changes will only serve to increase Cayman’s reputation as a modern and effective financial centre, ideally suited to working through the complexities of major cross-border insolvencies,” says David Roberts, a director of CIFSA.
In addition to the licensing requirement, the new framework provides for disciplinary action against practitioners that act improperly. It also gives foreign receivers and liquidators the power to recover assets in the Cayman Islands, in line with the legislation in the United Kingdom and the United States which recognises Cayman liquidators.
“There can be no doubt that our insolvency regime is equally friendly to investors as it is to creditors, with no special favours for the management of companies that are liquidated in the Cayman Islands,” says Bryan Hunter, CIFSA director.
Cayman Islands liquidators will also gain the power, where it is appropriate, to administer foreign companies which are based and conducting business in the Cayman Islands, while the revisions will formalise and clarify a number of other practices such as fee determination.