Today the OECD issued its Tax Co-operation 2009: Towards a Level Playing Field – 2009 assessment by the Global Forum on Transparency and Exchange of Information.
This is the fourth annual assessment of progress being made towards greater transparency and information exchange in the area of taxation. This report covers 87 jurisdictions, including all the major financial centres around the world.
The Global Forum on Transparency and Exchange of Information, which includes both OECD and non-OECD economies, has since its creation in 2000 worked to improve transparency and establish effective exchange of information. The publication of this year’s report comes at a time of heightened concern about tax evasion. In this new environment, governments are increasingly focused on the ability of jurisdictions to provide effective cooperation in international tax matters.
As the only comprehensive and objective compilation of such information, the reports are a vital tool in measuring the ability of countries to provide international co-operation in tax matters. A new feature of this year’s report is the presentation of summary assessments for each jurisdiction, providing a snapshot of their legal and administrative framework.
The report highlights the progress made up to 31 July 2009:
All OECD countries now accept Article 26 (Exchange of Information) of the OECD Model Tax Convention, as updated in 2005, following the withdrawal in March 2009 by Austria, Belgium, Luxembourg and Switzerland of their reservations to Article 26.
Hong Kong, China and Macao, China endorsed the standards at the 2005 Global Forum meeting in Melbourne and have now put forward legislation to enable them to implement the standards.
Singapore endorsed the standards on 10 February 2009 and proposed relevant legislation in June 2009 intended to comply with the internationally agreed tax standard.
More than 75 tax information exchange agreements (TIEAs) based on the Global Forum’s model have been signed since the beginning of 2008.
Andorra, Liechtenstein and Monaco – identified by the OECD in 2002 as un-cooperative tax havens – have endorsed the OECD standards and indicated their willingness to change their domestic legislation and to enter into agreements for the exchange of information for tax purposes.
Niue, which was identified as a tax haven by the OECD in 2000, reports that it has now eliminated its offshore sector and dissolved all of its international business companies, trusts, partnerships or other offshore entities.
Brunei, Costa Rica, Guatemala, Malaysia, the Philippines and Uruguay have all endorsed the OECD’s standards of transparency and exchange of information and agreed to implement them.
These developments mean that all countries surveyed by the Global Forum are now committed to the standard.
Most importantly the report shows that many other significant developments are underway as countries work to implement the OECD standards. In particular, virtually all countries are moving to eliminate strict bank secrecy for tax purposes. Commenting on these developments, Angel Gurría, Secretary-General of the OECD said: “What has happened is nothing less than a revolution. For decades it has been possible for taxpayers to hide income and assets from the taxman by abusing bank secrecy and other impediments to information exchange. What these developments show is that this will no longer be possible.”
Since the report was finalized on the 31st of July jurisdictions have continued to make substantial progress:
Belgium, the Cayman Islands and Luxembourg have now signed more than 12 agreements that meet the OECD standard and are considered to have substantially implemented the OECD standard for exchange of information.
Switzerland has now signed agreements with 4 OECD countries that provide for exchange of information to the OECD standard and has initialed agreements with at least 8 other OECD countries.
Singapore has signed 5 agreements that meet the standard and initialed a number of others. It has also introduced legislation intended to conform its existing treaty network to international standards.
Macao, China has passed legislation intended to enable it to implement the internationally agreed tax standard.
Austria has signed 2 agreements that meet the OECD standard and has initialed a number of others. Moreover, Austria expects to introduce legislation to its Parliament shortly to allow it to obtain access to bank information for exchange purposes.
The OECD’s multilateral TIEA negotiation pilot projects have produced concrete results, with jurisdictions in the Caribbean and Pacific Islands having concluded negotiations on dozens of TIEAs, some of which have already been signed and others initialed.
The report is being published in conjunction with the 5th meeting of the Global Forum in Los Cabos, Mexico, on 1-2 September. Central to the Global Forum’s discussions will be plans for establishing a robust peer review mechanism designed to ensure full implementation of international standards which have now been globally endorsed.
More information about the report is available from www.oecd.org/ctp/htp/cooperation
For further information about the OECD’s work on tax evasion, please visit www.oecd.org/tax/evasion
For further details about the Global Forum meeting in Los Cabos, please visit www.oecd.org/tax/globalforum/loscabos
31 August 2009
28 August 2009
London maintains lead in foreign exchange trading as global turnover drops by a quarter
The UK accounted for 36% of global foreign exchange trading in April 2009 according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. IFSL’s latest Foreign Exchange report states that the UK’s share of the global foreign exchange trading was slightly down compared to April 2008, but well ahead of the US (14%), Japan (7%) and Singapore (6%).
Average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled $2.9 trillion in April 2009, down nearly a quarter on the previous year’s record total. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $3.1 trillion a day. The decline in trading volume during the year was broad based across all currency pairs, instrument types and geographic regions. Weaker global trade due to the economic slowdown, a fall in activity by international investors in particular of hedge funds, and deleveraging all contributed to the decline in trading.
Marko Maslakovic, IFSL’s Senior Economist said: “The economic downturn did not interrupt liquidity in the foreign exchange markets, and foreign exchange was one of the few sources of steady profits for global banks over the past year. Bank revenues benefitted from relatively strong trading volumes since the start of the credit crisis, and a widening of foreign exchange trading spreads resulting from increased counter-party risk and volatility.”
London accounted for the bulk of the UK’s daily turnover averaging $1,269bn in April 2009. Its strong international position stemmed from trading generated by prime brokerage, investment banking and hedge funds, three areas of activity that are important to London’s position as a global financial centre. Twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined. Foreign owned institutions accounted for around 70% of foreign exchange trading in London.
Average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled $2.9 trillion in April 2009, down nearly a quarter on the previous year’s record total. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $3.1 trillion a day. The decline in trading volume during the year was broad based across all currency pairs, instrument types and geographic regions. Weaker global trade due to the economic slowdown, a fall in activity by international investors in particular of hedge funds, and deleveraging all contributed to the decline in trading.
Marko Maslakovic, IFSL’s Senior Economist said: “The economic downturn did not interrupt liquidity in the foreign exchange markets, and foreign exchange was one of the few sources of steady profits for global banks over the past year. Bank revenues benefitted from relatively strong trading volumes since the start of the credit crisis, and a widening of foreign exchange trading spreads resulting from increased counter-party risk and volatility.”
London accounted for the bulk of the UK’s daily turnover averaging $1,269bn in April 2009. Its strong international position stemmed from trading generated by prime brokerage, investment banking and hedge funds, three areas of activity that are important to London’s position as a global financial centre. Twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined. Foreign owned institutions accounted for around 70% of foreign exchange trading in London.
25 August 2009
EIB: funding development through tax havens
"The European Commission and big member states like France and Germany are planning a crack down on tax havens (while Britain is pretending to). So it might come as a surprise that the EU’s house bank, the European Investment Bank (EIB), is busily lending to companies established in tax havens.
Particularly notable is EIB lending for supposed development projects in poor countries. In reality, this ‘development assistance’ is a way to channel low-cost public capital to private equity firms that look for projects with juicy returns of 20 percent or more, before remitting the proceeds to low or no-tax and minimum transparency jurisdictions such as Mauritius..."
EIB: funding development through tax havens
Global Finance names World's 50 safest banks 2009
With bank stability still high on corporate and investor agendas,Global Finance publishes its 18th annual list of the world’s safest banks. After two tumultuous years that saw many of the world’s most respected banks drop out of the top-50 safest banks list, the dust appears to be settling. Those banks that kept an iron grip on their risk exposure before the financial crisis blew up have consistently topped the table and maintain their standing among the top echelon in this year’s ranking. At the same time, the big name banks that lost their safest bank ranking during the credit crunch are still absent from the list as they struggle to rebuild their credit standing.
The “World’s 50 Safest Banks” 2009 were selected through a comparison of the long-term credit ratings and total assets of the 500 largest banks around the world. Ratings from Moody’s, Standard & Poor’s and Fitch were used.
Global Finance has published its “World’s Safest Banks” listing for 18 years and this ranking has become a recognized and trusted standard of creditworthiness for the entire financial world.
“It’s been a bumpy two years for the rating agencies and many of the banks they evaluate,”says Global Finance publisher Joseph D. Giarraputo. “More than ever customers all around the world are viewing long term creditworthiness as the key feature of the banks with which they do business.”
- KfW (Germany)
- Caisse des Depots et Consignations (CDC) (France)
- Bank Nederlands Gemeenten (BNG) (Netherlands)
- Landwirtschaftliche Rentenbank (Germany)
- Zuercher Kantonalbank (Switzerland)
- Rabobank Group (Netherlands)
- Landeskreditbank Baden-Wuerttemberg-Foerderbank (Germany)
- NRW. Bank (Germany)
- BNP Paribas (France)
- Royal Bank of Canada (Canada)
- National Australia Bank (Australia)
- Commonwealth Bank of Australia (Australia)
- Banco Santander (Spain)
- Toronto-Dominion Bank (Canada)
- Australia & New Zealand Banking Group (Australia)
- Westpac Banking Corporation (Australia)
- ASB Bank Limited (New Zealand)
- HSBC Holdings plc (United Kingdom)
- Credit Agricole S.A. (France)
- Banco Bilbao Vizcaya Argentaria (BBVA) (Spain)
- Nordea Bank AB (publ) (Sweden)
- Scotiabank (Canada)
- Svenska Handelsbanken (Sweden)
- DBS Bank (Singapore)
- Banco Espanol de Credito S.A. (Banesto) (Spain)
- Caisse centrale Desjardins (Canada)
- Pohjola Bank (Finland)
- Deutsche Bank AG (Germany)
- Intesa Sanpaolo (Italy)
- Caja de Ahorros y Pensiones de Barcelona (Caixa) (Spain)
- Bank of Montreal (Canada)
- The Bank of New York Mellon Corporation (United States)
- DnB NOR Bank (Norway)
- Caixa Geral de Depositos (Portugal)
- United Overseas Bank (Singapore)
- Oversea-Chinese Banking Corp. (Singapore)
- CIBC (Canada)
- National Bank Of Kuwait (Kuwait)
- J.P. Morgan Chase & Co. (United States)
- UBS AG (Switzerland)
- Societe Generale (SG) (France)
- Wells Fargo & Co. (United States)
- Credit Suisse Group (Switzerland)
- Banque Federative du Credit Mutuel (BFCM) (France)
- Credit Industriel et Commercial (CIC) (France)
- Nationwide Building Society (United Kingdom)
- U.S. Bancorp (United States)
- Shizuoka Bank (Japan)
- Northern Trust Corporation (United States)
- National Bank of Abu Dhabi (UAE)
23 August 2009
Asia Private Equity Forum 2009
Date: 15 September 2009
Venue: Four Seasons Hotel, Hong Kong
The market turmoil has left no industry untouched. Private equity has changed hugely from last year, with funds now trying to make a profit in a distressed climate. Gone are leveraged buyouts, auctions and big-ticket exits; funds are instead restructuring, looking for bargains and preparing to deal with new regulation.
IFLR's Asia Private Equity Form 2009 is the only event that brings together the most recognised in-house and private practice figures for one day to consider tactics to deal with failing investments, opportunities to make money, and where to find new pools of capital.
The forum is designed to look at how private equity houses can make money and minimise loss, despite the chaos of a recession. While downturns stress investments, they also create great opportunities for bargains. If you intend to succeed in 2010's private equity market, this is your must-attend conference of the year.
Hot topics to be discussed include:
- How to avoid disaster when investments go bad
- All you need to know to successfully restructure your pre-IPO financing
- Where are the opportunities? Which assets to buy at what price?
- Risky purchases: mitigating the risk of litigation and identifying fraud
- Negotiating insider dealing and disclosure issues in Pipes and take-privates
- Case study: a practical guide to doing a take-private
- New pools of capital and where to find them
- The future of leveraged buyouts – how and when will they return?
- How the regulatory landscape will change and what you need to do about it
21 August 2009
AIMA welcomes FSA's European Directive Impact Assessment
The Alternative Investment Management Association (AIMA) – the global hedge fund industry association – has welcomed the impact assessment of the European Commission's draft directive on Alternative Investment Fund Managers commissioned by the UK's Financial Services Authority.
The FSA has commissioned CRA International to undertake a CBA (cost benefit analysis) of the proposed directive. Some of the main themes of the brief include: impact on investment portfolios, impact on costs to firms and investors, impact on functioning of markets and the question of systemic risk, and the effect on small company financing and European competitiveness.
AIMA is campaigning for the draft directive in its current form to be revised. Although the association welcomes the parts of the directive which relate to the G20 process such as the reporting of systemically relevant data by managers to their national supervisors and the registration and authorisation of managers, AIMA has argued that there are other elements of the directive (such as the sections relating to leverage, depositaries and marketing) which have been poorly drafted and which will have unintended consequences.
AIMA has sought an impact assessment of the directive by the European Commission, suggesting that it could impose major costs on a large part of Europe's financial services industry, reduce Europe's competitiveness in financial services and as a destination for international investment, and impact Europe's citizens through its effect on pensions, savings, jobs and real estate.
Andrew Baker, CEO of AIMA, said: "We're very glad that the FSA has commissioned this impact assessment for the UK, and we hope that the European Commission will now follow suit at a pan-EU level. It would be extraordinary if there were no proper assessment at a European level of the impact of a directive that could have extremely wide-ranging consequences."
The FSA has commissioned CRA International to undertake a CBA (cost benefit analysis) of the proposed directive. Some of the main themes of the brief include: impact on investment portfolios, impact on costs to firms and investors, impact on functioning of markets and the question of systemic risk, and the effect on small company financing and European competitiveness.
AIMA is campaigning for the draft directive in its current form to be revised. Although the association welcomes the parts of the directive which relate to the G20 process such as the reporting of systemically relevant data by managers to their national supervisors and the registration and authorisation of managers, AIMA has argued that there are other elements of the directive (such as the sections relating to leverage, depositaries and marketing) which have been poorly drafted and which will have unintended consequences.
AIMA has sought an impact assessment of the directive by the European Commission, suggesting that it could impose major costs on a large part of Europe's financial services industry, reduce Europe's competitiveness in financial services and as a destination for international investment, and impact Europe's citizens through its effect on pensions, savings, jobs and real estate.
Andrew Baker, CEO of AIMA, said: "We're very glad that the FSA has commissioned this impact assessment for the UK, and we hope that the European Commission will now follow suit at a pan-EU level. It would be extraordinary if there were no proper assessment at a European level of the impact of a directive that could have extremely wide-ranging consequences."
Brevan Howard Fund Limited - Re: Creation of Trading Subsidiaries
The Directors of Brevan Howard Fund Limited (the 'Company') wish to announce the creation of two subsidiaries through which Brevan Howard Master Fund Limited (the 'Master Fund') will invest, BHIOF Investments Limited and BHMF Securities Limited (the 'Subsidiaries').
BHMF Securities Limited was incorporated in Mauritius on 12th September 2008 bearing incorporation number 83599 as per the Certificate of Incorporation issued by the Registrar of Companies on 12th September 2008. It has been licensed under Section 97 of the of the Securities Act 2005 to operate as a Collective Investment Scheme and has been granted a Category 1 Global Business 22nd September 2008, bearing number C108006622 from the Financial Services Commission ('FSC').
BHIOF Investments Limited was incorporated in Mauritius on 20th June 2008 bearing incorporation number 81413 as per the Certificate of Incorporation issued by the Registrar of Companies on 20th June 2008. It has been licensed under Section 97 of the of the Securities Act 2005 to operate as a Collective Investment Scheme and has been granted a Category 1 Global Business 23rd June 2008, bearing number C108006157 from the FSC.
The purpose of each of the subsidiaries is to hold certain investments in India however the Company does not expect any such investments to be of a material nature.
20 August 2009
OECD: Transfer Pricing and Treaties in a Changing World
More than 600 participants from all over the globe will gather in Paris for what is expected to be the transfer pricing event of the year.
Some of the world’s leading specialists will share their expertise on cutting-edge transfer pricing and treaty developments that affect governments and multinational enterprises in a changing world.
The conference programme will also offer ample opportunities to exchange views with representatives from more than 100 governments and from the business community, universities and international organisations.
Key topics on the agenda:
● Adjustments and corresponding adjustments:
The role of Articles 7, 9 and 25 of the Model Tax Convention
● Information powers and transfer pricing:
Documentation requirements, exchange of information and burden of proof issues
● Deductibility of interest in related party situations
● Transfer pricing in a downturn economy
● Attribution of profits to Permanent Establishments: designing a modern Article 7
● Transfer pricing and customs
● Treaty and transfer pricing aspects of intangibles characterization
● Recent developments in the areas of transfer pricing and treaties
Some of the world’s leading specialists will share their expertise on cutting-edge transfer pricing and treaty developments that affect governments and multinational enterprises in a changing world.
The conference programme will also offer ample opportunities to exchange views with representatives from more than 100 governments and from the business community, universities and international organisations.
Key topics on the agenda:
● Adjustments and corresponding adjustments:
The role of Articles 7, 9 and 25 of the Model Tax Convention
● Information powers and transfer pricing:
Documentation requirements, exchange of information and burden of proof issues
● Deductibility of interest in related party situations
● Transfer pricing in a downturn economy
● Attribution of profits to Permanent Establishments: designing a modern Article 7
● Transfer pricing and customs
● Treaty and transfer pricing aspects of intangibles characterization
● Recent developments in the areas of transfer pricing and treaties
18 August 2009
Cook Islands: CEO - Financial Services Development Authority
The Government of the Cook Islands has recently established a new statutory corporation called the Financial Services Development Authority (FSDA). The FSDA is dedicated to the development of the Cook Islands financial services centre. The FSDA has a board of directors and is recruiting its Chief Executive Officer (CEO). The CEO will be a director of the FSDA and will be accountable to the FSDA board. The CEO will be based in the Cook Islands and will spearhead Government's program for the growth and development of the offshore financial services industry.
Duties:
1. In conjunction with both other FSDA directors and other industry stakeholders the CEO will be required to produce a strategic business plan for the industry for the consideration of the FSDA Board. The CEO will then be responsible for the implementation and ongoing review of the business plan.
2. Development and implementation of marketing strategies and initiatives.
3. New product development and delivery. This will involve both a creative architectural dimension as well as a coordination, advisory and industry liaison role.
4. An advisory and technical support role to Government in relation to all industry issues including both industry initiatives and challenges.
5. A coordination and liaison role both within Government and between Government and private sector industry stakeholders in relation to industry matters.
6. Represent the jurisdiction and the industry both domestically and at international organisations.
7. To communicate and work with both domestic and international regulatory agencies to ensure that the best interests and reputation of the jurisdiction are preserved and enhanced.
8. To be responsible for and to administer the daily operations and finances of the FSDA.
Skills (Essential)
1. An in depth and global knowledge of the offshore industry and the products offered.
2. Tertiary qualifications in law, accounting or a related discipline.
3. Significant international industry experience at a professional level.
4. Ability to liaise with representatives of the offshore industry, international bodies and other regulatory agencies.
5. Excellent communication skills and an able public speaker.
6. Professionally motivated and able to work alone and unsupervised.
Skills (Desirable)
7. Prior office management experience.
8. Prior Government experience including working with legislation.
9. Prior regulatory experience associated with the industry.
10. Prior marketing experience.
The FSDA is seeking an exceptional person with specific experience and skills for this new position. An appropriate remuneration package and term contract will be offered to the successful applicant. Applications should be made in writing and include a CV and be addressed to The Financial Services Development Authority and sent by e-mail to: florence@dpmoffice.gov.ck
Applications close 31 August 2009
Duties:
1. In conjunction with both other FSDA directors and other industry stakeholders the CEO will be required to produce a strategic business plan for the industry for the consideration of the FSDA Board. The CEO will then be responsible for the implementation and ongoing review of the business plan.
2. Development and implementation of marketing strategies and initiatives.
3. New product development and delivery. This will involve both a creative architectural dimension as well as a coordination, advisory and industry liaison role.
4. An advisory and technical support role to Government in relation to all industry issues including both industry initiatives and challenges.
5. A coordination and liaison role both within Government and between Government and private sector industry stakeholders in relation to industry matters.
6. Represent the jurisdiction and the industry both domestically and at international organisations.
7. To communicate and work with both domestic and international regulatory agencies to ensure that the best interests and reputation of the jurisdiction are preserved and enhanced.
8. To be responsible for and to administer the daily operations and finances of the FSDA.
Skills (Essential)
1. An in depth and global knowledge of the offshore industry and the products offered.
2. Tertiary qualifications in law, accounting or a related discipline.
3. Significant international industry experience at a professional level.
4. Ability to liaise with representatives of the offshore industry, international bodies and other regulatory agencies.
5. Excellent communication skills and an able public speaker.
6. Professionally motivated and able to work alone and unsupervised.
Skills (Desirable)
7. Prior office management experience.
8. Prior Government experience including working with legislation.
9. Prior regulatory experience associated with the industry.
10. Prior marketing experience.
The FSDA is seeking an exceptional person with specific experience and skills for this new position. An appropriate remuneration package and term contract will be offered to the successful applicant. Applications should be made in writing and include a CV and be addressed to The Financial Services Development Authority and sent by e-mail to: florence@dpmoffice.gov.ck
Applications close 31 August 2009
17 August 2009
Global private equity investments down 40% in 2008 and 80% in first half of 2009 as buyout activity slows
• $189bn of private equity invested globally in 2008, down 40 per cent on the previous year. Private equity investments hit 12-year low in the first half of 2009 at $24bn.
• Funds raised worldwide fell 8 per cent in 2008 and 60 per cent in the first half of 2009.
• Funds raised for secondary market investments reached record levels in the first half of 2009.
• Investments and funds raised in the UK fell 38 per cent and 21 per cent respectively in 2008.
Private equity investments fell 40 per cent in 2008 to $189bn, with buyout activity dropping as private equity firms struggled to obtain debt finance from banks to complete deals, according to new research today from International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide.
IFSL’s report Private Equity 2009 also states that private equity investments hit a 12 year low in the first half of 2009, dropping to $24bn, 80 per cent down on the same period in 2008. Private-equity backed deals generated only seven per cent of global merger & acquisition volume in 2008, the lowest level since 2001 and down from the record high of 21 per cent in 2006. This figure fell even further to 3.5 per cent in the first half of 2009.
Despite the financial crisis, however, fund-raising levels were down only eight per cent in 2008 to $450bn, a figure influenced heavily by the relatively strong start to the year. The slowdown in fund-raising accelerated in 2009, with under $100bn being raised between January and June, equivalent to a two-thirds drop on the same period in 2008. The secondary market for private equity, where existing stakes in private equity holdings are bought and sold, has seen a record $15.6bn raised in the first half of 2009, already setting a new annual record with six months left in the year.
Meanwhile, global private equity funds under management totalled $2.5 trillion at the end of 2008. The 15 per cent increase during the year was due to strong fund raising activity and an increase in unrealised portfolio investments as firms were reluctant to exit their stakes in market conditions of falling valuations.
Worldwide investments of UK private equity firms mirrored falls on global markets, declining by 38 per cent in 2008 to £19.5bn, while the aggregate value of funds raised fell by a fifth to £23.1bn. The UK private equity market, which remains the most developed outside the US, managed 17 per cent of global investments and 14 per cent of funds raised in 2008. London has successfully held its position as the largest European private equity centre, second only to New York globally.
Marko Maslakovic, Senior Economist at IFSL, said: “The slowdown in private equity investments and funds raised in the first half of 2009 is likely to persist for the rest of the year. Although banks will remain the largest lenders to private equity firms, other participants may have the opportunity to enter this market as some $500bn in loans extended on existing deals will need to be refinanced in the next few years. Despite the challenges presented by the tough market conditions, however, London has successfully maintained its position as Europe’s leading centre for private equity investment and fund management. This reflects the City’s continued attractiveness as a home to a broad range of funds, and offering of access to a deep pool of private equity expertise.”
Click here to view PDF of the Private Equity 2009 report
• Funds raised worldwide fell 8 per cent in 2008 and 60 per cent in the first half of 2009.
• Funds raised for secondary market investments reached record levels in the first half of 2009.
• Investments and funds raised in the UK fell 38 per cent and 21 per cent respectively in 2008.
Private equity investments fell 40 per cent in 2008 to $189bn, with buyout activity dropping as private equity firms struggled to obtain debt finance from banks to complete deals, according to new research today from International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide.
IFSL’s report Private Equity 2009 also states that private equity investments hit a 12 year low in the first half of 2009, dropping to $24bn, 80 per cent down on the same period in 2008. Private-equity backed deals generated only seven per cent of global merger & acquisition volume in 2008, the lowest level since 2001 and down from the record high of 21 per cent in 2006. This figure fell even further to 3.5 per cent in the first half of 2009.
Despite the financial crisis, however, fund-raising levels were down only eight per cent in 2008 to $450bn, a figure influenced heavily by the relatively strong start to the year. The slowdown in fund-raising accelerated in 2009, with under $100bn being raised between January and June, equivalent to a two-thirds drop on the same period in 2008. The secondary market for private equity, where existing stakes in private equity holdings are bought and sold, has seen a record $15.6bn raised in the first half of 2009, already setting a new annual record with six months left in the year.
Meanwhile, global private equity funds under management totalled $2.5 trillion at the end of 2008. The 15 per cent increase during the year was due to strong fund raising activity and an increase in unrealised portfolio investments as firms were reluctant to exit their stakes in market conditions of falling valuations.
Worldwide investments of UK private equity firms mirrored falls on global markets, declining by 38 per cent in 2008 to £19.5bn, while the aggregate value of funds raised fell by a fifth to £23.1bn. The UK private equity market, which remains the most developed outside the US, managed 17 per cent of global investments and 14 per cent of funds raised in 2008. London has successfully held its position as the largest European private equity centre, second only to New York globally.
Marko Maslakovic, Senior Economist at IFSL, said: “The slowdown in private equity investments and funds raised in the first half of 2009 is likely to persist for the rest of the year. Although banks will remain the largest lenders to private equity firms, other participants may have the opportunity to enter this market as some $500bn in loans extended on existing deals will need to be refinanced in the next few years. Despite the challenges presented by the tough market conditions, however, London has successfully maintained its position as Europe’s leading centre for private equity investment and fund management. This reflects the City’s continued attractiveness as a home to a broad range of funds, and offering of access to a deep pool of private equity expertise.”
Click here to view PDF of the Private Equity 2009 report
Jersey Finance response to the HMRC announcement to issue notice to 300 financial institutions to obtain offshore account details
The announcement that HMRC have been given permission by the First-Tier (Tax) Tribunal to obtain details of overseas accounts held by UK residents from more than 300 financial institutions is entirely expected and should not have a major impact on Jersey’s Finance Industry.
The initiative is an extension of the 2006 Commissioner hearing against banks and designed to coincide with the anticipated New Disclosure Order (‘Tax amnesty’), which will take place between 1 September and 30 November 2009.
There has been speculation about how extensive such a HMRC investigation will be and whether it can access account information based in Jersey. The basis for these investigations is within the UK territory and the individuals based in the UK. HMRC are legally only entitled to information which is in ‘the power or possession’ of the institution and their employees that are based in the UK. Where such information is not in the UK and is not accessible to the employees then it is clear that ‘offshore’ information cannot be accessed whether it relates to Jersey or other countries.
Banking institutions operating in Jersey have an obligation to their customers under the customary law and their client contracts to maintain confidentiality in all legitimate cases. This is not the secrecy approach favoured by some centres but respecting clients rights to privacy. Jersey continues to adopt the approach that it would never condone any client evading their tax responsibilities and in the rare cases where individuals do try to evade their tax obligations at home, Jersey is committed to actively co-operating with domestic tax authorities in their investigations.
Those UK resident customers with legitimate reasons for keeping funds in Jersey and whose tax affairs are in order can be reassured that this measure will have no impact on them.
14 August 2009
British Virgin Islands and Cayman Islands implement internationally agreed tax standard
New Zealand has signed tax information exchange agreements with the British Virgin Islands and the Cayman Islands, bringing to 12 the number of agreements that the British Virgin Islands and the Cayman Islands have on exchange of information for tax purposes.
This moves both jurisdictions into the category of ‘Jurisdictions that have substantially implemented the internationally agreed tax standard’ in the Progress Report initially published by the OECD Secretariat on 2 April 2009.
Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcomed the signing: “Today the British Virgin Islands and the Cayman Islands take their place alongside other countries that have substantially implemented the internationally agreed tax standard. Six jurisdictions have moved into this category since April. We look forward to working further with the British Virgin Islands and Cayman Islands as they extend their network of agreements and work to swiftly and effectively implement them.”
12 August 2009
India: Draft Direct Tax Code
The Honorable Finance Minister released the Draft Direct Tax Code and the Discussion Paper on 12th August, 2009. An attempt has been made to simplify the language to enable better comprehension and to remove ambiguity to foster voluntary compliance. Kindly go to the official website of the Ministry of Finance to submit your comments.
10 August 2009
Banks Boost Net Exports of UK Financial Sector to a Record £50bn in 2008
Net exports of the UK financial sector rose by 28% to a record £50.5bn in 2008, according to the annual UK Financial Sector Net Exports report by International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. The banking, insurance, fund management and ship broking industries all contributed to growth in UK export earnings, with banks’ earnings of £31.1bn providing the core of net exports, or 62% of the total.
Net exports of banks increased by 31% in 2008, with 85% generated by exports of Financial Intermediation Services Indirectly Measured (FISIM) and spread earnings. FISIM exports, a measure of net margin income, rose 82% to £15.4bn while spread earnings from derivatives, securities and foreign exchange trading were also up by 17% from £9.5bn to £11.1bn. Elsewhere, the contribution of insurance to net exports rose by a half to £8.0bn, while shipbrokers’ contribution rose to £948m. The fund managers’ contribution to financial sector net exports increased slightly to £4.2bn, while securities dealers’ contribution dropped from £4.8bn to £3.9bn.
Having been in the £10bn to £11bn range in each of the first three quarters of 2008, the quarterly financial services trade surplus jumped to £13.1bn in the fourth quarter due to a rise in banks’ net margin income and spread earnings. The surplus reverted to £10.3bn in the first quarter of 2009.
Duncan McKenzie, IFSL’s Director of Economics, said: “A steady improvement in the quarterly trade surplus during 2009 to £12bn in the fourth quarter would mean UK financial sector net exports are likely to remain at the level of £50bn registered in 2008.”
Stephen Wright, IFSL’s Chief Executive, noted: “The strong net export performance of the UK financial sector of £50bn in 2008 offset over a half of the £93bn trade deficit in goods: demonstrating the substantial contribution of the financial sector to the UK balance of payments, notwithstanding the global economic slowdown.”
In addition to the financial sector’s contribution, the trade surplus generated by professional services - legal and accounting services and management consultancy – rose to £6.8bn in 2008 from £6.1bn in 2007.
Click here to view PDF of UK Financial Sector Net Exports 2009 report
Net exports of banks increased by 31% in 2008, with 85% generated by exports of Financial Intermediation Services Indirectly Measured (FISIM) and spread earnings. FISIM exports, a measure of net margin income, rose 82% to £15.4bn while spread earnings from derivatives, securities and foreign exchange trading were also up by 17% from £9.5bn to £11.1bn. Elsewhere, the contribution of insurance to net exports rose by a half to £8.0bn, while shipbrokers’ contribution rose to £948m. The fund managers’ contribution to financial sector net exports increased slightly to £4.2bn, while securities dealers’ contribution dropped from £4.8bn to £3.9bn.
Having been in the £10bn to £11bn range in each of the first three quarters of 2008, the quarterly financial services trade surplus jumped to £13.1bn in the fourth quarter due to a rise in banks’ net margin income and spread earnings. The surplus reverted to £10.3bn in the first quarter of 2009.
Duncan McKenzie, IFSL’s Director of Economics, said: “A steady improvement in the quarterly trade surplus during 2009 to £12bn in the fourth quarter would mean UK financial sector net exports are likely to remain at the level of £50bn registered in 2008.”
Stephen Wright, IFSL’s Chief Executive, noted: “The strong net export performance of the UK financial sector of £50bn in 2008 offset over a half of the £93bn trade deficit in goods: demonstrating the substantial contribution of the financial sector to the UK balance of payments, notwithstanding the global economic slowdown.”
In addition to the financial sector’s contribution, the trade surplus generated by professional services - legal and accounting services and management consultancy – rose to £6.8bn in 2008 from £6.1bn in 2007.
Click here to view PDF of UK Financial Sector Net Exports 2009 report
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