2012 will see a continuation of the steady growth since 2009 and the opportunity to increase market share, says Ben Leung, managing partner of accounting firm PKF Cayman.
As the global economy slowly emerges from the 2008 recession, the Cayman Islands financial services industry has, primarily driven by mutual funds and insurance captives, experienced steady growth from 2009 through 2011. Ben Leung the managing partner of accounting firm PKF Cayman believes the industry players are still cautious on the global outlook and thus expects growth for 2012 to be consistent with the recent past.
PKF’s own business followed the industry growth trend during the past two years, also supported by new and emerging markets.
“We have seen growth in our asset management clients stemming primarily from the Latin American region and the number of our captive insurance clients,” Leung says.
As the firm continued its expansion in 2011, PKF Cayman also added new staff. This included the newly created position of a technical director to help the auditors break into bank and trust market and improve PKF’s local footprint in the financial services industry through the provision of technical accounting updates to local service providers and articles published on recent accounting standards.
Meanwhile no parts of PKF’s business witnessed a decline last year.
“We have obtained office space in a prestigious location which will allow us to grow dramatically and we continue to invest in cutting edge technology,” says Leung. “This is a statement of intent to our staff and clients and demonstrates our ambition to continue to be a leading audit and accountancy firm.”
Going forward, Leung says with the continued growth expected for 2012, he sees the opportunity for increasing the firm’s market share and number of clients in all of the mutual funds, captive insurance, bank and trust industries.
“At present our clients and the existing service providers that we interact with respect our responsiveness, availability and expertise,” he says.
PKF’s main task is to market and publicise its services more widely, says Leung.
“Our challenge is to grow via informing the wider industries about our offering, which is a value for money product, where we are competing on quality. We are achieving this by raising our profile by presenting seminars and writing articles, supporting local fund, insurance, trust, banking conferences via our attendance and most importantly by doing excellent work, which results in word of mouth recommendations.”
PKF (Cayman) Ltd. is a member of PKF International, a network that acts as one of the world’s leading consulting and accounting networks, currently represented by 245 independent member firms in 125 countries, employing some 23,500 people worldwide.
Leung explains that a clear benefit of the network is that it allows the firm to service clients with a global presence. It also gives PKF Cayman access to specialist updates on accounting and regulatory changes as they occur in the respective jurisdictions.
“Responsiveness, attention to detail, deep industry knowledge and technical expertise are the hallmarks of all PKF International member firms and our clients are the beneficiaries,” says Leung. “The skills and talents of hundreds of PKFI professionals can be directed to PKF Cayman clients and that makes us the clear choice for growing companies seeking true global excellence.”
The firm also benefits from its relationship with EisnerAmper LLP, a PKF International network firm and 50 per cent owner of PKF (Cayman) Ltd. As one of the largest audit firms in New York EisnerAmper has extensive relationships in one of the biggest financial centres in the world and expertise and resources that PKF Cayman regularly draws upon, explains Leung.
This is particularly important as one of the main trends affecting players in the financial services industry is increased regulatory and compliance requirements. Leung names specifically the Alternative Investment Fund Managers Directive in Europe, Dodd Frank and Form PF in the United States, international accounting standards IFRS 10 through IFRS 13 which become effective 1 January 2013 and IFRS 9 which becomes effective 1 January 2015, as well as enhanced auditing standards.
“These trends have led to increased communication with our clients throughout the audit process and outside of audit season when our clients are contemplating entering into certain transactions,” says Leung.
Locally, regulatory change is another driver that may actually help support the financial services industry in the Cayman Islands, says Leung, who advocates that the government continues its proven track record of consulting with industry players prior to drafting and enacting changes to legislation, tailoring local laws to benefit the local industries and supporting the Cayman Islands Monetary Authority.
Two of the most recent changes, he highlights, are the new improved insurance law and the requirement to register master funds with CIMA.
“We have a new and improved Insurance Law, the Insurance Law 2010, which implements recommendations from the 2009 International Monetary Fund review and is partially structured to protect existing business and attract new business into the Cayman Islands. Notably there are two new categories of insurance licences being Class C (for CAT bond or special purpose insurers) and Class D (for reinsurers).”
In addition on 5 December 2011 the Cayman Islands legislature approved the Mutual Funds (Amendment) Bill 2011, requiring the registration of master funds with the CIMA. “The amendments are intended to align with practices in other jurisdictions and to maintain the Cayman Islands as a leader in the regulation of hedge funds,” says Leung.