Mauritius ranks 17th in Overall Ease of Doing Business 2010

Mauritius ranks 17th in global rankings on Overall Ease of Doing Business 2010 and tops Sub-Saharan economies for the 2nd consecutive year, according to the World Bank group's Doing Business 2010 Report: Reforming Through Difficult Times, launched yesterday at the World Bank Office in Port Louis.

Mauritius climbed seven steps from its previous global ranking at 24 in the Doing Business 2009 report and moved into the top twenty economies on the overall ease of doing business out of the 183 economies rated by the International Finance Corporation and the World Bank. This is attributed mostly to the continuous reforms upon which the country has embarked thus transforming and improving the business climate into a more globally competitive one. Reforms have also made the investment procedures significantly easier for people to do business and at the same enabled firms to withstand the global recession with less difficulty.

Areas of reform in Mauritius pertain mainly to employing workers, registering property, getting credit information, trading across borders, closing a business and enforcing contracts. The country has adopted a new insolvency law, established a specialized commercial division within the court towards improving contract enforcement, eased property transfers by setting a limit of 15 days to obtain final property titles from the land registry and expedited trade processes with the introduction of electronic submissions of customs declarations and bills of lading.

According to the World Bank, Sub-Saharan Africa is reforming at a fast pace with 67 reforms recorded in 29 Sub-Saharan Africa's 46 economies. On the ease of doing business rankings, Mauritius preceded South Africa placed at the 34th position, whilst Rwanda is the top reformer worldwide jumping 76 places in the global ratings from 143 to 67 followed by Liberia the second most active reformer in the region. The World Bank group furthermore points out in its report that there are still many opportunities for improvement, and several good practices in the region to learn from.

Doing Business 2010 is the seventh in an annual series of reports issued by the International Finance Corporation and the World Bank and ranking 183 economies on the overall ease of doing business. The ratings are based on ten indicators namely, starting a business, dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

McKinsey: Rethinking the model for offshoring services

BPO providers often rely on a limited number of geographic locations, exposing themselves to unnecessary risk. They can mitigate these risks in the same way that financial managers do—by diversifying their holdings.

The outsourcing and offshoring industry is at a turning point. What began as a small-scale sector dedicated to application development, accounting, and payroll has become, as of 2008, an $80 billion global industry, addressing a range of business processes and technology services. As the IT services and BPO industry matures, however, challenges are emerging.

Our research finds that more that 70 percent of offshore delivery centers, including both wholly owned captive operations as well as vendors, narrow their global operations to just three locations, often situated in only two countries (most frequently India, China or the Philippines). This reliance on a limited number of geographic regions—historically driven by the availability of highly skilled, low-cost labor in these areas—is exposing providers to a variety of location-specific risks. These include abrupt currency and wage fluctuations, intense competition for employees, and regulatory limits. While a narrow geographic concentration may result in lower labor costs at the outset, the overall risks are higher, according to our research. The same is true on a microlevel: our data show that when a delivery center in a large Indian city grows beyond 3,000 employees, costs spiral and performance begins to deteriorate.

• Exhibit 1: One Paris-based company offshored high–end IT services work across several locations, seeking to minimize exposure to geographic, currency, and labor issues.
• Sidebar: An enhanced menu of location choices
• Exhibit 2: Nontraditional offshoring locations offer trade-offs between cost and risk.
• Exhibit 3: Companies that leverage the full breadth of the talent pool improve the performance of their offshoring centers.
• Exhibit 4: Companies must search for new locations and set up new centers proactively, before the performance of existing centers deteriorates.
• Exhibit 5: One provider sought to create a next-generation global delivery model by allocating work dynamically.

Rethinking the model for offshoring services

Regus Opens 1,000th Centre in Mauritius

Regus, the leading provider of innovative workspace solutions, today announces the official opening of its 1,000th business centre in Port Louis, Mauritius. Coming almost 20 years to the day since the company opened its first centre in Brussels, Belgium, Regus now has a presence in 76 territories and more than 500,000 customers.

Welcoming the opening, M. Rajoo Jadoo, Director of the Board of Investment (BOI) in Mauritius said: "Mauritius is increasingly becoming known as a regional business hub and services centre. In this context, the Board of Investment is striving to establish a favourable investment climate in which operating businesses becomes easier. The investor who chooses Mauritius can now begin business activities and secure all the required permits within three days. The Regus business model perfectly complements our objective of allowing investors to be quickly operational by providing them with corporate-type workspaces. We are glad that such services are now available in Mauritius. We sincerely thank Regus for bringing its expertise and worldwide network to the country."

Mark Dixon, Global CEO, Regus comments: "In reaching this historic landmark we have, over the last 20 years, had to open a centre every week. This has only been possible because of the hard work and dedication of our people and I'd like to take this opportunity to thank them all, both past and present, in helping us get to where we are today. But this is not a time to rest on our laurels; we're already working on the next 1,000 centres, starting in Beaver Creek, Ohio.

"Be it Mauritius or Monaco, Milwaukee or Manila we are redefining the world of work, offering business of all sizes flexible, innovative cost effective and inspiring spaces in which to meet, work and collaborate."

The current economic crisis and the rise of the mobile and home-based worker is forcing companies to re-evaluate their workplace needs and ask themselves if they have the right mix of space.

Dixon adds: "We are on the cusp of workplace revolution, which will see fixed office workers become the exception not the norm. For decades companies have struggled to accurately forecast their workplace needs. As a result, on any given day something in the region of fifty percent of office space sits empty, while the other fifty percent is being utilized for functions that could be performed anywhere. The way people work is changing forever and Regus centres, such as this one in Mauritius, are at the forefront of this revolution."

The Regus centre, located in Ebene, is 10 kilometers from the island's capital, Port Louis, and will be based in Cybercity, a prestigious corporate complex. Cybercity is home to a wide range of multinational corporations and is considered the country's information technology hub. Regus clients will benefit from a business-ready environment, including fully furnished and equipped offices, meeting rooms, a business lounge and administrative support staff.

Guernsey Finance - Hong Kong & Shanghai Delegation

Guernsey will be building on the work from its April visit during this delegation in October.

Delegation visit schedule:

23 & 24 October, Hong Kong
Half-day conference with China Economic Review 'Guernsey - Offshoring for the Asian Market: Investment Funds' (23 October)

25 to 28 October, Shanghai

Including:

- Official launch of new Guernsey Finance office (26 Oct)
- Half-day Guernsey conference with China Economic Review 'Guernsey - Offshoring for the Chinese Market: Funds and Wealth Management (27 Oct)
- Industry meetings in Shanghai (28 Oct)

Further details on the half day conferences in both Hong Kong and Shanghai are available through the flyer

Doing Business 2010: Reforming through Difficult Times

A record 131 economies around the globe reformed business regulation in 2008/09, according to the IFC–World Bank Doing Business 2010 report.

That is more than 70 percent of the 183 economies covered by the report— the largest share in any year since the annual report was first published in 2004. And this progress came against the backdrop of a global economic crisis.

Doing Business 2010: Reforming through Difficult Times recorded 287 reforms between June 2008 and May 2009, up 20 percent from the previous year. Reformers around the world focused on making it easier to start and operate businesses, strengthening property rights, and improving commercial dispute resolution and bankruptcy procedures.

Reforms measured by Doing Business can play an important role in enabling countries to recover from the economic crisis. The financial and economic crisis has become a jobs crisis in developing countries, and SME growth offers the best prospects for job creation.

“The quality of business regulation helps determine how easy it is to reorganize troubled firms to help them survive difficult times, to rebuild when demand rebounds, and to get new businesses started,” says Penelope Brook, Acting Vice President for Financial and Private Sector Development for the World Bank Group.

Developing Economies Set a Fast Pace—with Rwanda in the Lead

Three-quarters of low- and lower-middle-income economies reformed, accounting for two-thirds of reforms recorded by Doing Business 2010 (figure 1.2).

Among these, Rwanda is the star and the world’s top reformer of business regulation, making it easier to start businesses, register property, protect investors, trade across borders, and access credit. It marks the first time a Sub-Saharan African economy is the top reformer.

This year, there were four newcomers among the global top ten reformers: Liberia, the United Arab Emirates, Tajikistan and Moldova. Others, aside from Rwanda, are Egypt, Belarus, the Former Yugoslav Republic of Macedonia, the Kyrgyz Republic, and Colombia. Colombia and Egypt have been top global reformers in four of the past seven years.

Regional Pace Setters

Eastern Europe and Central Asia is the fastest-reforming region for the sixth year in a row. Despite being severely affected by the global crisis, all but one of the region’s 27 economies reformed business regulation over the past year. Five of the ten top global reformers are from the region. In the past two years reforms have been moving eastward from the European Union accession countries. Albania, Belarus and the Kyrgyz Republic implemented reforms in several areas for the third year in row. Inspired by their neighbors, Kazakhstan, Montenegro and Tajikistan continued reforms this past year.

The Middle East and North Africa has had the largest surge in reforms. Seventeen of the region’s 19 economies made reforms in 2008/09. Egypt, Jordan, Saudi Arabia, and the United Arab Emirates are leading global and regional reformers. (figure 1.1)

What Consistent Reformers Do

Doing Business analyzes regulations affecting the life cycle of a domestic, small to medium-size firm: from business start-up and operations, to trading across borders, paying taxes, and closure. The ease of doing business index ranks economies from one to 183. Singapore, a consistent reformer, ranks top on the ease of doing business, a position it has kept for the fourth year running. New Zealand is runner-up.

As Doing Business has tracked regulatory reforms over the past six years, some common features among successful reformers have started to emerge:

• They follow a longer-term agenda aimed at increasing the competitiveness of their firms and economy. Colombia, Egypt, Malaysia and Rwanda are all examples of economies incorporating business regulation reforms into a broader competitiveness agenda.
• They stay proactive. Singapore and Hong Kong (China) rank among the top economies on the ease of doing business and are also some of the most consistent reformers.
• They implement broad-based reforms. Over the past five years Colombia, Egypt, Georgia, the FYR Macedonia, Mauritius and Rwanda each implemented at least nineteen reforms, covering eight or more of the ten areas measured by Doing Business.
• They are inclusive. They involve all relevant public agencies and private sector representatives and institutionalize reform at the highest level. Colombia and Rwanda have formed regulatory reform committees reporting directly to the president or prime minister. More than 20 other economies, including Burkina Faso, India, Liberia, FYR Macedonia, Syrian and Vietnam, have formed committees at the ministerial level. Reforms in Egypt involved 32 government agencies supported by the parliament.
• They stay focused thanks to a long-term vision supported by specific goals

Heavy, costly regulatory burdens can push firms—and employment—into the informal sector, where firms are not registered and do not pay taxes and where workers have limited access to formal credit, institutions or protections. The global crisis is expected to further increase informal activity. According to the OECD, almost two-thirds of the world’s workers are already estimated to be employed in the informal sector. Most are in low- and lower-middle-income economies. And a disproportionate share is from already vulnerable groups, such as youth and women. Doing Business can give policymakers insights to a part of the solution - how to reform business regulation.

UK : FSA fines Barclays £2.45m for failures in transaction reporting

The Financial Services Authority (FSA) has fined Barclays Capital Securities Ltd and Barclays Bank PLC (Barclays) £2.45m for failing to provide accurate transaction reports to the FSA and for serious weaknesses in systems and controls in relation to transaction reporting.

Firms are required to submit data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse: insider trading and market manipulation.

The FSA discovered discrepancies in Barclays’ data while reviewing a suspected incident of market abuse by a third party. A subsequent review of Barclays’ transaction reporting arrangements revealed that it did not have adequate systems and controls in place to meet the transaction reporting requirements as well as a substantial number of errors in the data submitted to the FSA.

Alexander Justham, FSA director of markets, said:

“Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Barclays’ reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse.

“The penalty imposed on Barclays is significantly higher than previous penalties imposed for transaction reporting errors. This reflects the serious nature of Barclays’ breaches and is a warning to other firms that the FSA will not tolerate inadequate systems and controls.”

Barclays’ breaches occurred despite repeated reminders to firms of their obligations to provide accurate data and the importance of compliance with the FSA rules on transaction reporting during the course of 2007 and 2008.

The firm has taken a number of steps to address the concerns raised including commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors.

Barclays co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30% discount. Without the discount the fine would have been £3.5m

The Final Notice can be found on the FSA website

HSBC Mauritius Exciting Offer on INR Remittances into India

HSBC Mauritius provides a unique advantage to Global Business clients who need to remit funds into India:

SAME DAY VALUE - we can remit Indian Rupees into India on the SAME DAY.

Exciting offer - TT remittance charges and FIRC costs waived

To encourage Global Business clients to effectively take advantage of our INR remittance service, we are pleased to announce our offer will be effective from 9th September to 31st December 2009.

Competitive INR rates

HSBC Mauritius offers competitive INR rates for your FEX conversion from major convertible currencies.

Switzerland replaces United States at top of competitiveness rankings

Switzerland tops the overall ranking in The Global Competitiveness Report 2009-2010, released today by the World Economic Forum ahead of its Annual Meeting of the New Champions 2009 in Dalian. The United States falls one place to second position, with weakening in its financial markets and macroeconomic stability. Singapore, Sweden and Denmark round out the top five. European economies continue to prevail in the top 10 with Finland, Germany and the Netherlands following suit. The United Kingdom, while remaining very competitive, has continued its fall from last year, moving down one more place this year to 13th, mainly attributable to continuing weakening of its financial markets. The People’s Republic of China continues to lead the way among large developing economies, improving by one place this year, solidifying its position among the top 30. Among the three other large BRIC economies, Brazil and India also improve, while Russia falls by 12 places. Several Asian economies perform strongly with Japan, Hong Kong SAR, Republic of Korea and Taiwan, China also in the top 20. In Latin America, Chile is the highest ranked country, followed by Costa Rica and Brazil.

A number of countries in the Middle East and North Africa region are in the upper half of the rankings, led by Qatar, United Arab Emirates, Israel, Saudi Arabia, Bahrain, Kuwait and Tunisia, with particular improvements noted in the Gulf States, which continue their upward trend of recent years. In sub-Saharan Africa, South Africa, Mauritius and Botswana feature in the top half of the rankings, with a number of other countries from the region measurably improving their competitiveness. Click here to read the highlights of the Report.

- Download the full Global Competitiveness Rankings (PDF or Excel format)

"The strong interdependence among the world’s economies makes this a truly global economic crisis in every sense. Policy-makers are presently struggling with ways of managing these new economic challenges, while preparing their economies to perform well in a future economic landscape characterized by growing uncertainty. In a difficult global economic environment, it is more important than ever for countries to put into place strong fundamentals underpinning economic growth and development,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the Report added, “Amid the present crisis, it is critical that policy-makers not lose sight of long-term competitiveness fundamentals amid short-term urgencies. Competitive economies are those that have in place factors driving the productivity enhancements on which their present and future prosperity is built. A competitiveness-supporting economic environment can help national economies to weather business cycle downturns and ensure that the mechanisms enabling solid economic performance going into the future are in place.”

The rankings are calculated from both publicly available data and the Executive Opinion Survey, a comprehensive annual survey conducted by the World Economic Forum together with its network of Partner Institutes (leading research institutes and business organizations) in the countries covered by the Report. This year, over 13,000 business leaders were polled in 133 economies. The survey is designed to capture a broad range of factors affecting an economy’s business climate. The Report also includes comprehensive listings of the main strengths and weaknesses of countries, making it possible to identify key priorities for policy reform.

The Global Competitiveness Report’s competitiveness ranking is based on the Global Competitiveness Index (GCI), developed for the World Economic Forum by Sala-i-Martin and introduced in 2004. The GCI is based on 12 pillars of competitiveness, providing a comprehensive picture of the competitiveness landscape in countries around the world at all stages of development. The pillars include Institutions, Infrastructure, Macroeconomic Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency, Labour Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size, Business Sophistication, and Innovation.

The Report contains a detailed profile for each of the 133 economies featured in the study, providing a comprehensive summary of the overall position in the rankings as well as the most prominent competitive advantages and disadvantages of each country/economy based on the analysis used in computing the rankings. Also included is an extensive section of data tables with global rankings for over 110 indicators.

This year’s Report also includes a number of discussions of selected countries and regions including the United States, the large emerging BRIC economies and the 12 recent accession members of the European Union, providing an in-depth analysis of the issues affecting national competitiveness.

Download the full Report (PDF 3.85 MB)

Mishcon de Reya launches Fraud Network website to fight rising international fraud

Mishcon de Reya announces the launch of the Fraud Network website, the online resource of the Fraud Network which consists of “tried and tested” Fraud Specialists across the globe. The Firm decided to set up the website to allow clients to easily find a creative, aggressive and experienced lawyer in another jurisdiction, who is recommended, respected and capable of handling sensitive and complicated fraud cases.

The Fraud Network has been growing over the years and now consists of over 25 legal experts in fraud and anti counterfeiting from 21 different countries who can share knowledge and work together to investigate international fraud matters for clients, obtain multi-jurisdictional injunctions to freeze assets or preserve evidence, trace and recover assets which have been dissipated internationally and much more.

Gary Miller, Founder of Mishcon de Reya’s Fraud Group and Founder and Fraud Network coordinator of the Fraud Network, commented: ”With the rise of international fraud it is important for clients to find a legal team they trust, while under a lot of pressure to take decisions within a short timeframe. The Fraud Network and its new website provide them with the assurance to find talented lawyers via a few 'clicks', who together form a successful international team.”

Only individuals - not their firms - are eligible for membership of the Fraud Network. The Fraud Network provides the client with at least one referee for each member and they do not earn 'commissions' or other financial incentives for referring clients to members.

Jersey FSC: Amendment to Money Laundering

The Commission has published today a Consultation Paper that sets out proposed amendments to the Money Laundering (Jersey) Order 2008 (the “Order”).

The Order requires businesses within its scope to apply customer due diligence measures, to keep records, and to have policies and procedures in place to prevent and detect money laundering and terrorist financing. Businesses that are covered by the Order include banks, investment businesses, trust companies, lawyers, accountants, and estate agents.

The main purpose of the draft Money Laundering (Amendment No. 4) (Jersey) Order 200- (“Amendment No. 4”) is to deal with some of the technical points that have been raised in a recent review of Jersey’s framework to prevent and detect money laundering and terrorist financing by the International Monetary Fund (the “IMF”). That review has now been completed and the IMF’s final report is expected shortly.

The paper also considers the possibility of extending the power that is given in Article 23C of the Order to the Minister for Treasury & Resources to apply countermeasures, where this may address a particular risk of money laundering or terrorist financing.

The main effect of Amendment No. 4 would be to:

• Clarify the application of customer due diligence measures to trusts and other legal arrangements.
• Clearly set out the records that a Money Laundering Compliance Officer and Money Laundering Reporting Officer must have access to in order to carry out their statutory functions.
• Require particular attention to be paid to implementing policies and procedures that are sufficient to prevent and detect money laundering and terrorist financing in subsidiaries and branches that are situated in countries and territories that do not, or insufficiently apply, the Financial Action Task Force Recommendations.
• Restate the requirement that customer information must always be collected before a relationship is established - where a customer is introduced by one business to another.
  Amend the scope of some of the concessions that may be used when applying due diligence measures to a customer who is considered to present a low risk of money laundering or terrorist financing.
• The proposed amendments have been discussed with the Commission’s Steering Group for the Prevention and Detection of Money Laundering and Terrorist Financing.

A copy of the Consultation Paper can be downloaded from the Commission’s Website by clicking here

G20:Meeting of Finance Ministers and Central Bank Governors

1. We, the G20 Finance Ministers and Central Bank Governors, met ahead of the Pittsburgh Summit to assess our progress in delivering the Global Plan for Recovery and Reform and agree further actions to ensure sustainable growth and build a stronger international financial system. We reiterated the need for swift and full implementation of all the commitments made at the Washington and London Summits and have agreed the further necessary steps to strengthen the financial system, as set out in the accompanying declaration.
2. Our unprecedented, decisive and concerted policy action has helped to arrest the decline and boost global demand. Financial markets are stabilising and the global economy is improving, but we remain cautious about the outlook for growth and jobs, and are particularly concerned about the impact on many low income countries. We will continue to implement decisively our necessary financial support measures and expansionary monetary and fiscal policies, consistent with price stability and long-term fiscal sustainability, until recovery is secured.
3. We must build on what we have already achieved and tackle the significant challenges that lie ahead. It is vital for growth that we act to support lending, including dealing with impaired assets and conducting robust stress tests where necessary. We must promote employment through structural policies, active labour market policies, and training and education. We will work to address e xcessive commodity price volatility by improving the functioning and transparency of physical and financial markets and promoting a closer dialogue between producer and consumer countries. We welcome the swift implementation of the $250 billion trade finance initiative and reaffirm our commitment to fight all forms of protectionism and to reach an ambitious and balanced conclusion to the Doha Development Round.
4. We agreed the need for a transparent and credible process for withdrawing our extraordinary fiscal, monetary and financial sector support as recovery becomes firmly secured. Working with the IMF and the FSB we will develop cooperative and coordinated exit strategies, recognising that the scale, timing and sequencing of actions will vary across countries and across the types of policy measures.
5. We will work to achieve high, stable and sustainable growth, which will require orderly rebalancing in global demand, removal of domestic barriers and promotion of the efficient functioning of global markets. The need to combat climate change is urgent, and we will work towards a successful outcome in Copenhagen.
6. We have made significant progress in strengthening the IFIs, but more needs to be done. We are close to completing the delivery of $850 billion of additional resources agreed in April, including an expanded, more flexible New Arrangement to Borrow; and $50 bi llion to support social protection and safety nets, boost trade and safeguard development in low income countries. We welcome the overhaul of the IMF’s lending facilities. We encourage the Multilateral Development Banks to make full use of their balance sheets and reaffirm our commitment to ensure they have appropriate capital, recognising that they are fully on track to deliver $100 billion of additional lending. In the period ahead we need to focus on providing resources to low income countries to support structural reforms and infrastructure development.
7. We look forward to prompt implementation of the 2008 IFI governance reforms, and will complete World Bank reforms by Spring 2010 and the next IMF quota review by January 2011. We recognise that the IMF should remain a quota-based organisation; and as part of the reforms, the voice and representation of emerging and developing economies, including the poorest, must be significantly increased to reflect changes in the world economy. To achieve this we look forward to substantial progress in Pittsburgh. We also reaffirm our commitment to increase a ccountability, strengthen the involvement of Fund Governors in strategic oversight, and agree to move to an open, transparent and merit-based selection of IFI management. To improve the role and effectiveness of the Fund in supporting stronger cooperation and ensuring a more sustainable global economy and international financial system, candid, even-handed, and independent surveillance will be vital. We call on the IMF, working with other international institutions, to continue assessing our actions to secure a sustainable recovery.

Declaration on further steps to strengthen the financial system, 5 September 2009 (PDF 15.5KB)

Progress report on the actions of the London and Washington G20 Summits, 5 September 2009 (PDF 482KB)

Bangkok's Bumrungrad Hospital: Expanding the Footprint of Offshore Health Care - Knowledge@Wharton

It's been called the Mecca of medical tourism. For the past 10 years, Thailand's Bumrungrad International Hospital has been wooing patients from Boston to Bahrain with a combination of lower-cost, state-of-the-art medical care along with service worthy of a five-star hotel. In what seems far from the hustle and bustle of the streets of Bangkok, more than one million patients, including some 40% from over 190 countries, visit every year for treatment at Bumrungrad's high-tech, upscale facilities...

http://knowledge.wharton.upenn.edu/article.cfm?articleid=2327

OECD Global Forum consolidates tax evasion revolution in advance of Pittsburgh

Today, on the eve of the Pittsburgh G20 meeting, the Global Forum on Transparency and Exchange of Information dealing with tax matters, took major steps to confirm the end of the era of banking secrecy as a shield for tax evaders.

Hailing the breakthrough OECD Secretary-General Angel Gurría said “what we are witnessing is nothing short of a revolution. By addressing the challenges posed by the dark side of the tax world, the campaign for global tax transparency is in full flow. We have equipped ourselves with the institutional means to continue the campaign. With the crisis, global public opinion’s expectations are high, their tolerance of non-compliance is zero and we must deliver”.

Representatives from the Forum which now numbers almost 90 jurisdictions around the world and a host of International Organisations gathering in Mexico, took concrete steps to empower the Global Forum to play the leading role in the global campaign to fight tax evasion.

Building on the extraordinary progress made in the last few months to incorporate the globally accepted standards developed by the OECD in both new and existing agreements, the Forum took the following key decisions:

Teeth: to put in place a robust, comprehensive and global monitoring and peer review process to ensure that members implement their commitments; a Peer Review Group has been established to examine the legal and administrative framework in each jurisdiction and practical implementation of these standards. A first report on monitoring progress will be issued by end 2009.

Extended Global Reach: to further expand its membership and to enshrine the principle that all members enjoy equal footing.

Faster Agreements: to speed up the process of negotiating and concluding information exchange agreements including exploring new multilateral avenues.

Developing country assistance: to put in place a coordinated technical assistance program to assist smaller jurisdictions to implement the standards rapidly.

In its Assessment of Tax Co-operation in 2009 issued on Monday “OECD assessment shows bank secrecy as a shield for tax evaders coming to an end”) the Global Forum highlighted that the standards on transparency and exchange of information pioneered by the OECD are now almost universally accepted and that extraordinary progress has already been made towards their full implementation.

The Global Forum’s conclusions will be reported to the G20 Finance ministers who will be meeting in London on 4-5 September and to the meeting of the G20 Leaders Summit in Pittsburgh on 24-25 September.

The Forum also agreed on the need to convene regularly, with the next meeting scheduled for 2010.

Background

The Global Forum on Transparency and Exchange of Information was created in 2000 to provide an inclusive forum for achieving high standards of transparency and exchange of information in a way that is equitable and permits fair competition between all jurisdictions, large and small, developed and developing. The initial group of jurisdictions numbered 32. It now brings together almost 90 jurisdictions. It has been the driving force behind the development and acceptance of these international standards. The 2009 Global Forum meeting was its fifth, the last taking place in 2005.

In 2002, Global Forum members worked together to draft a Model Agreement on Exchange of Information on Tax Matters which is now used as a basis for bilateral agreements. Since 2006, the Global Forum has published annual assessments of the legal and administrative frameworks for transparency and exchange of information in more than 80 countries.

Its most recent assessment, Tax Co-operation 2009: Towards a Level Playing Field based on information available up until 31 July 2009, was published on 31 August 2009.

Since the London G20 meeting in April, over 50 new Tax Information Exchange Agreements have been signed (doubling the total number of Agreements signed since 2000) and over 40 double taxation conventions have been signed.

As a consequence, a further 6 jurisdictions have since substantially implemented the internationally agreed tax standards.

Read the summary of outcomes from the meeting

Read the speech by the OECD Secretary-General

Read the latest progress report

Read the latest assessment by the Global Forum.

Reuters Global Wealth Management Summit

Reuters Summits are the 'must read' for those trading and investing in today's financial markets. Bringing together top executives from the biggest companies in the world with our global teams of specialist journalists, the Summits provide you with the news and content that will help in forming your decisions.

The upcoming Reuters Wealth Management Summit will focus on a variety of issues ranging from what are the lessons that wealthy investors learned during the financial crisis to what kind of products are investors looking for now to whether or not industry players expect to see more consolidation in an industry that has already shrunk.

The 2009 Reuters Global Wealth Management Summit in Boston, Geneva, Tokyo and Singapore will be held October 5-7

Upcoming Summits:

Global Wealth Management Oct 5 - 7 Boston, Geneva, Tokyo, Singapore
Washington Oct 19 - 21 Washington, DC
Middle East Investment Oct 26 - 28 Dubai, Kuwait
Autos Nov 2 - 4 Detroit, Paris
Health Nov 9 - 12 New York
Global Finance Nov 16 - 19 New York, London, Hong Kong
India Investment Nov 23 - 25 Mumbai, Bangalore
Global Media Nov 30 - Dec 3 New York, London, Asia
Investment Outlook Dec 8 - 10 New York, London
Aerospace and Defense Dec 14 - 16 Washington, DC

Conyers appoints Fund Specialist as Head of Mauritius Office

Multi-jurisdictional law firm Conyers Dill & Pearman today announced the appointment of Craig Fulton as Head of its Mauritius office. Craig will focus on generating business in the burgeoning markets of India and Southern Africa as the firm continues its major business development push into these regions.

Craig has relocated from Conyers’ Bermuda office, having worked for several years prior to that in the firm’s Cayman Islands office, where he specialized in hedge funds and private equity investments. Prior to joining Conyers, Craig was Head of Legal Affairs (Western Hemisphere) for Fortis Bank and Fortis Prime Fund Solutions in the Cayman Islands. Craig holds a Bachelor of Commerce and a Bachelor of Laws from the University of Natal, Durban.

Craig’s significant corporate and investment funds experience will bring added benefits to clients as FDI into India and Africa through Mauritius continues to grow. In addition to lawyers in Mauritius, Conyers also has a dedicated team of Mauritius lawyers in Dubai and London.

John Collis, Chairman of Conyers, commented: “Craig’s intelligence, energy and enthusiasm will add tremendous value to our Mauritius practice. His broad corporate and funds experience will strengthen our capabilities in Mauritius, which focuses particularly on investment funds, private equity funds, joint ventures, and banking and finance transactions. Mauritius is an important market to us, and Craig’s appointment reflects our commitment to providing the highest quality legal advice in locations convenient to our clients.”

Craig said of his move: “I look forward to developing Conyers’ Mauritius practice with our expert team of Mauritius lawyers. Conyers’ work in the region has already led to a significant number of instructions and client demand is growing. With its focus on complex investment funds work, our Mauritius office promises exciting prospects.”

Craig’s appointment as Head of office follows Conyers’ formal launch of its Mauritius practice in June, a result of recent amendments to Mauritius law which allow foreign law firms to be established there. In July, Conyers also bolstered its Mauritian expertise in London with the addition of Devalingum Gopalla, who specializes in investment funds. Craig and Dev complement Sonia Xavier in Dubai and Nicolas Richard and Sameer Tegally in Mauritius. In addition to Mauritius, Conyers advises on the major offshore jurisdictions of the Cayman Islands, British Virgin Islands and Bermuda.

HSBC Mauritius Seminar : 'Derivatives - New Legal Framework and Business Opportunities'

The recent enactment of the Insolvency Act 2009 is a major development for Mauritius International Financial Centre as it provides for the legal enforceability of "netting" for financial instruments such as derivatives.

The new legal framework will facilitate the settlement of transactions on derivative products, namely, interest rate swaps, currency swaps and currency options, and allow us, for instance, to implement standard international legal documentation such as ISDA agreements.

At HSBC we believe that this recent development presents opportunities that can benefit our clients. You will have the oppotunity to listen to our guest speaker, Mr Iqbal Rajahballee, renowned counsel from BLC Chambers, who will be able to enlighten us on the recent legal developments. The seminar will also aim to show the relevance of derivatives and structured products in today's market environment.

OECD assessment shows bank secrecy as a shield for tax evaders coming to an end

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

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.

Click here to view PDF of Foreign Exchange 2009 report

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.”

1. KfW (Germany)
2. Caisse des Depots et Consignations (CDC) (France)
3. Bank Nederlands Gemeenten (BNG) (Netherlands)
4. Landwirtschaftliche Rentenbank (Germany)
5. Zuercher Kantonalbank (Switzerland)
6. Rabobank Group (Netherlands)
7. Landeskreditbank Baden-Wuerttemberg-Foerderbank (Germany)
8. NRW. Bank (Germany)
9. BNP Paribas (France)
10. Royal Bank of Canada (Canada)
11. National Australia Bank (Australia)
12. Commonwealth Bank of Australia (Australia)
13. Banco Santander (Spain)
14. Toronto-Dominion Bank (Canada)
15. Australia & New Zealand Banking Group (Australia)
16. Westpac Banking Corporation (Australia)
17. ASB Bank Limited (New Zealand)
18. HSBC Holdings plc (United Kingdom)
19. Credit Agricole S.A. (France)
20. Banco Bilbao Vizcaya Argentaria (BBVA) (Spain)
21. Nordea Bank AB (publ) (Sweden)
22. Scotiabank (Canada)
23. Svenska Handelsbanken (Sweden)
24. DBS Bank (Singapore)
25. Banco Espanol de Credito S.A. (Banesto) (Spain)
26. Caisse centrale Desjardins (Canada)
27. Pohjola Bank (Finland)
28. Deutsche Bank AG (Germany)
29. Intesa Sanpaolo (Italy)
30. Caja de Ahorros y Pensiones de Barcelona (Caixa) (Spain)
31. Bank of Montreal (Canada)
32. The Bank of New York Mellon Corporation (United States)
33. DnB NOR Bank (Norway)
34. Caixa Geral de Depositos (Portugal)
35. United Overseas Bank (Singapore)
36. Oversea-Chinese Banking Corp. (Singapore)
37. CIBC (Canada)
38. National Bank Of Kuwait (Kuwait)
39. J.P. Morgan Chase & Co. (United States)
40. UBS AG (Switzerland)
41. Societe Generale (SG) (France)
42. Wells Fargo & Co. (United States)
43. Credit Suisse Group (Switzerland)
44. Banque Federative du Credit Mutuel (BFCM) (France)
45. Credit Industriel et Commercial (CIC) (France)
46. Nationwide Building Society (United Kingdom)
47. U.S. Bancorp (United States)
48. Shizuoka Bank (Japan)
49. Northern Trust Corporation (United States)
50. National Bank of Abu Dhabi (UAE)

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

View latest agenda here

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."

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.

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

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

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

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.

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.”

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.

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

IOSCO publishes due diligence good practices for investment managers

The International Organization of Securities Commissions’ (IOSCO) Technical Committee has published a final report - IOSCO Good Practices in relation to Investment Managers’ Due Diligence When Investing in Structured Finance Instruments (Investment Manager Due Diligence Practices) – which contains guidelines aimed at assisting both investment management industry participants and regulatory bodies, in assessing the quality of their due diligence procedures regarding investments in structured finance instruments (SFI) by collective investment schemes (CIS) offered to retail investors.

The Investment Manager Due Diligence Practices were developed in cooperation with industry representatives following the recommendation made in the Report of the Task Force on the Subprime Crisis, published in May 2008, that the Technical Committee’s Standing Committee on Investment Management (TCSC5) conduct work, and develop good practices, on investment managers’ due diligence processes and procedures when investing in structured finance instruments on behalf of collective investment schemes (CIS) offered to retail investors.

Key Messages

The Investment Manager Due Diligence Practices are based on five key messages that should inform any review, development or reconsideration of due diligence policies and procedures. These are:

• Investing in a structured finance instrument (SFI) is different from investing in a more traditional instrument often referred to as a plain vanilla instrument. The risks are different, and call for a tailored due diligence process;
• If you do not understand a SFI, do not buy it;
• Due diligence is and must remain a value-added process. It is not and must never become a plain box-ticking process;
• Due diligence is generally a three step, and iterative process, which is structured around the understanding of the underlying assets of the SFI, of its structure and of how it fits into the CIS mandate; and
• Due diligence is not a static process. It is an on-going process, which starts at the time the initial investment in the SFI is contemplated and ends when the SFI matures or is divested.

IOSCO Investment Manager Due Diligence Good Practices

These good practices are aimed at assisting industry and regulators in their understanding, assessment and monitoring of investments in SFIs on behalf of CIS’. The practices are broken down into the three stages which should be included in the due diligence process, and also address the question of the use of third parties in the due diligence process, including credit rating agencies. The three stages are:

1. Analysing the underlying assets of the SFI

When assessing a SFI, investment managers should assess the availability, reliability and relevance of information available both on the market and on the underlying assets;

i. The unique properties of the specific pool of assets shouldn’t be assumed to be identical to the broader asset category. Investment managers should ensure that their analysis of the underlying assets is based on information that is relevant for that specific type of underlying assets;

2. Analysing the structure of the SFI

iii. The analysis of the structure of the SFI should be conducted both in “normal” and in “stress” scenarios;
iv. The investment manager should also ensure that he has or has access to the right expertise to conduct an analysis of a particular SFI, including legal expertise;
v. Whatever the structure of the SFI, the asset manager should understand how cash flows will be allocated to the different tranches of the SFI;
vi. The asset manager should use the practices laid out in this paper to build his own opinion on the SFI: is the price right for the risks taken on behalf of the investors;

3. How does the SFI fit into the CIS mandate

vii. The investment manager should check that investing in the SFI on behalf of the CIS is consistent with the disclosures, mandate and internal operations of the CIS.

Use of Third Parties in the Due Diligence Process

The investment manager should understand the methodology, parameters and basis on which the opinion of a third party was produced. He should have adequate means and expertise to challenge the methodology and parameters.

The Technical Committee is not adopting principles with respect to due diligence in this paper, however it may choose to undertake such a project in the future.

Insolvency Act 2009: Shoring up Corporate Goodwill and Protecting Stakeholders

A one-day workshop on the Insolvency Act 2009, with the participation of regulators, bankers, accountancy professionals and law practitioners, is being held today at Le Sirius Labourdonnais Hotel in Port Louis.

An initiative of the Insolvency Service in collaboration with the Ministry of Finance and Economic Empowerment, the workshop will serve as a platform where the participants will exchange views on the new legislation. The Insolvency Act 2009 which came into effect on 1st June this year is a fundamental component to improve the ease of doing business in all sectors of the economy and at all stages of an enterprise's development that is from start-up to closing down.

Launching the workshop, this morning, the Vice-Prime Minister, Minister of Finance and Economic Empowerment, Dr. Rama Sithanen, stressed that the Insolvency Act will secure the reputation of Mauritius as a well governed business and financial services centre and a trustworthy investment destination. It is also expected to shore up corporate goodwill and protect all stakeholders, he added.

The main thrusts of the Act are to consolidate and modernise the legal framework for insolvency by updating and integrating it in into a modern, omnibus legislation. In addition, the law redefines the priority of claims in the distribution of assets in liquidation and gives workers' unpaid salary higher priority than the secured creditors. It also sets alternative measures to bankruptcy.

Besides, the Insolvency Act 2009 reflects the objectives of the Government in implementing an insolvency regime that effectively balances the interests of debtors, creditors and other stakeholders while making the insolvency proceedings more transparent.