Caymans Islands promises to increase transparency?

The Financial Times has an interesting report this morning:

The Cayman Islands are poised to break with decades of secrecy by opening thousands of companies and hedge funds domiciled on the offshore Caribbean territory to greater scrutiny.

Interesting, though with all such moves one always has to read the small print, and Cayman will have to do a lot to substantially shift its #2 position on TJN's Financial Secrecy Index: we will see how serious this is. Still, on this evidence it does look promising.  The reforms, the FT says in what appears to be an exclusive report (which isn't covered in local Cayman news so far,) reportedly involve the authorities making public the names of thousands of previously hidden companies and their directors.

In proposals sent to Cayman-based hedge fund businesses and seen by the Financial Times, the Cayman Islands’Monetary Authority (CIMA) has outlined plans to create a public database of funds domiciled on the island for the first time, listing funds’ directors, pending an ongoing consultation process due to close in mid-March. Make no mistake, though: this isn't obviously an end to Cayman's financial secrecy. We see no signs that it is preparing to ditch its Confidential Relationships (Preservation) Law enforcing financial secrecy, for instance.

Pressure for reform on the Caymans has been relentless, not just from the likes of TJN and the U.S. media which last year focused relentlessly on the Cayman-heavy secrecy covering the financial affairs of U.S. presidential candidate Mitt Romney. Earlier, the FT reported on the gigantic scandal of Caymans-based directors sitting on the boards of hundreds of hedge funds each, clearly unable to fulfil their duties of oversight properly. Warnings about this sort of thing had been coming from officials in the Cayman Islands itself, for some time.

The tax haven has been struggling, too, under the weight of massive corruption scandals and fiscal problems. But pressure has come from other quarters too:

Most of the pressure for change, however, was applied by hedge fund investors rather than politicians. Many of the world’s largest pension funds have until now had no way of verifying details of the Cayman funds they invest with or their directors.

“We have been screaming for more transparency for some time now,” said Vincent Vandenbroucke, head of operational due diligence at Hermes BPK, which makes hedge fund investments on behalf of some of the UK’s biggest pension funds. “It’s no longer acceptable for [offshore] directors to act as rubber stamps.”

As with the debates over corporate tax avoidance, TJN finds itself allied with large sections of the business community, against those sections that seek to exploit distortions in markets. This appears, at least on this evidence, to be yet another vindication of our position.

How about some transparency now from the British Virgin Islands?