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11 Nov 2009

Conyers Hosts 8th Annual Offshore Law Forum in New York

As the global economy continues to evolve in the aftermath of the credit crunch, lawyers from Conyers Dill & Pearman provided a timely update on regulatory developments offshore to over 100 lawyers and financial executives at the firm’s 8th Annual Offshore Law Seminar, held last month at the Grand Hyatt in New York.

Overall, the message was that the leading international financial centres in which Conyers operates have emerged as those able to enact innovative legislation with sound financial regulation meeting the standards of international bodies including the OECD and G20.

A panel of Conyers lawyers provided an in-depth look at the state of the market and the impact of the credit crunch on legal systems in the major jurisdictions of the Cayman Islands, British Virgin Islands (“BVI”) Bermuda and Mauritius.

Robert Briant, Managing Partner of the firm’s BVI office, opened the seminar by drawing an important distinction between offshore financial centres and tax secrecy jurisdictions: “The jurisdictions we advise on are tax neutral locations that facilitate international cross-border transactions. Bank secrecy jurisdictions facilitate the confidentiality of one’s affairs. The difference could not be more stark. Each of our jurisdictions plays a legitimate role in global transactions, and all are on the OECD White List.” Briant also gave updates on the BVI commercial court and upcoming Securities and Business Act, which will require every BVI company worldwide which carries on investment business to be licensed.

Richard Finlay, Managing Partner of the firm’s Cayman Islands office, discussed developments in the Cayman Islands: “Cayman has modernized its partnership legislation in response to the increased use of exempted limited partnerships by private equity and hedge funds. Also, we are pleased to report this quarter that for the first time since 2008, there has been an increase in the number of funds being licensed in Cayman. Another important development is the admission of CIMA as a member of IOSCO, which will allow Cayman funds access to emerging markets like India. The timing could not be better: we are already seeing Cayman funds investing in India through Mauritius subsidiaries.”

Devalingum Gopalla, a Mauritius associate based in the firm’s London office, talked about Mauritius as the jurisdiction of choice for structuring investments into Africa, India and China: “Mauritius has an extensive network of double taxation treaties and offers something different to the traditional offshore jurisdictions. It is attracting some of the biggest enterprises in the US and Europe who are looking to invest in emerging markets, and has fast become a hub for private equity investment into Africa. Mauritius already accounts for about 44% of foreign direct investment into India. We are seeing increased interest from China in investing in Africa through Mauritius.”

Meanwhile in Bermuda, new Partnership Legislation introduced this summer is expected to improve the efficiency of formation and administration of Bermuda partnerships and streamline procedures for overseas partnerships and will be particularly welcomed by investment fund clients. The Companies Act was also revised this year to improve the efficiency for Bermuda companies listed on US exchanges.

Anthony Whaley, partner in the firm’s Bermuda office, commented: “We are pleased to be able to deliver insight on the leading jurisdictions to onshore lawyers, particularly during this time of global economic uncertainty. The audience’s response was very positive, and we look forward to next year’s forum.”

Liongate Fund Of Hedge Funds Dubai Expansion

HedgeCo Archives - Winner of the “Fund of Hedge Funds Leader of the Year” 2009, Liongate Capital Management, has opened a Dubai office after being awarded a license by the Dubai Financial Services Authority (DFSA) to operate from the Dubai International Financial Centre (DIFC).

The $2.3 billion FoHF's manager will focus on advising institutional clients in the MENA region on allocations to hedge fund investment strategies out of the new Dubai office.

“With investors increasingly seeking to diversify their portfolios to include alternative investments, the long-term potential for the growth of the hedge-funds market in the Middle East, North Africa and India is strong." His Excellency Dr Omar Bin Sulaiman, Governor of the DIFC, commented. "DIFC offers the infrastructure and regulations for providers of hedge fund investments to take advantage of opportunities in the region. The establishment of Liongate Capital Management’s office is testimony to DIFC’s ability to offer a secure and productive platform for the growth of hedge funds. It also demonstrates the continued confidence of the global financial industry in the potential of the regional market.”

Liongate Capital Management has also appointed hedge fund allocator, Fahad Al-Bader, as Senior Executive Officer of the Dubai office. Fahad Al-Bader has over six years experience of investing in hedge funds. Previously, he was Head of Hedge Funds at the Kuwait Fund, Head of Alternative Investments at Ryada Capital and an Investment Analyst at KIA (Kuwait Investment Authority). Fahad al-Bader is a graduate of Purdue University, and joined Liongate Capital Management in May 2008.

Smarter Government Is Needed In Hedge Fund Oversight, Says CCMC

The U.S. Chamber of Commerce's Center for Capital Markets Competitiveness (CCMC) today reaffirmed its position on reforming America's capital markets and outlined actions the administration, Congress, and the business community must take to help restore and strengthen our nation's capital markets. The Chamber again called for modernizing the regulations governing our capital markets in a way that puts the economy, jobs, and all investors first.

"We welcome Senate action to reform our broken financial regulatory system," said David Hirschmann, president and CEO of the U.S. Chamber's Center for Capital Markets Competitiveness (CCMC). "This effort needs to have a strong focus on protecting consumers and investors, while ensuring that our markets also supply businesses and entrepreneurs with the capital they need to grow, innovate, and create jobs."

The Chamber supports:
-- An overhaul of existing regulators and greater transparency in
financial markets.
-- Greater coordination among regulators, including mechanisms to ensure
regulators have the information needed to identify systemic risks.
-- Closing the gaps to end regulatory "dead zones" and eliminating
duplicative layers in current regulatory structure.
-- Greater global regulatory cooperation primarily focusing on cross
border regulatory issues and financial reporting.
-- An exit strategy for programs established by Congress, Treasury, and
the Federal Reserve to address the financial crisis.
-- Predictable mechanisms to dissolve failing financial institutions in
an orderly fashion.
-- Registration of hedge fund advisers, including appropriate reporting
to regulators.

-- Ensuring transparency in the derivatives markets through a greater use
of central clearing, while preserving the accessibility and
affordability of the over-the-counter markets for corporate end-users
of derivatives.

The Chamber opposes regulatory proposals that would impair financial markets and our members' access to capital:

-- A new stand-alone Consumer Financial Protection Agency, which would
add a duplicative regulatory layer to the current structure.
-- Proposals such as so-called proxy access that advance the agendas of
activist special interests at the expense of good governance.
-- One-size-fits all corporate governance rules such as those
contemplated in proposed "Shareholder Bill of Rights" legislation.
-- A systemic risk regulator that duplicates existing regulation or
permanently designates specific financial institutions as systemically
significant, thereby designating them "too big to fail."

-- Mechanisms for sustained, open-ended government intervention in the
private economy. We can only support resolution authority if it is
narrowly tailored to achieve the orderly bankruptcy and dissolution of

"The regulatory systems governing our markets need to be modernized, and the current debate should not be about more regulation, but smarter regulation," said Hirschmann. "We must ensure the viability of global accounting, protect companies from excessive litigation and abusive enforcement, and stop special interests from stretching the rules governing markets in order to pursue activist agendas. We look forward to working with Chairman Dodd in shaping a regulatory system needed to meet the demands of a dynamic 21st century economy."

Since its inception three years ago, the Center for Capital Markets Competitiveness has led a bipartisan effort to modernize and strengthen the outmoded regulatory systems. Fundamental to this effort, the Chamber believes we must eliminate duplicative and overlapping layers of regulation and enforcement that undermine efficiency.