Location, location, location – the strategic advantages of the Channel Islands
Tuesday 12th April 2011
When decisions are made on where to list funds and other investment entities, it is not only The Channel Islands Stock Exchange (CISX) which can demonstrate a number of strategic advantages but the location itself which has proved so valuable in attracting high quality business.
The term ‘location, location, location’ normally associated with the property world has a resonance also with financial services business and the Channel Islands have proved to be an ideal location, both geographically and strategically, to meet the requirements of the professional investment community.
Stable
Undoubtedly the CISX benefits from the stable nature of government in the Channel Islands. The Jersey finance industry is celebrating its fiftieth anniversary this year and Guernsey is not far behind. Politically, the islands benefit from a relationship with the English Crown which is enshrined within 800 years of charters and conventions. As a result of this historical association with the English Crown, the Islands have remained self governing with their own parliaments responsible for domestic affairs including fiscal matters. This autonomy has assisted the Islands in developing the tax neutral platform which is an important component of the services offered to the international finance community.
Historical and continued government support for the finance industries has provided the commitment to enacting internationally recognised regulatory standards which has helped the Channel Islands to be recognised as leading international financial centres. This has also provided an environment to foster an established framework of professional advisors and service providers to ensure that levels of resources and standards of corporate governance continue to excel when scrutinised.
The Exchange also benefits from the breadth and depth of financial services that the Channel Islands have consistently provided to international investors. It is frequently the case that when issuers are considering the CISX for their listing, they know that they will receive expert and professional support from a wide choice of providers. Few competitor jurisdictions can match the depth of expertise available in banking, funds, insurance and wealth management from the Channel Islands.
Location
Strategically, the Channel Islands geographic location has also proved advantageous. Positioned within the UK time zone, the financial service providers in St Helier and St Peter Port are able to undertake business with US markets when they open for the day and with the Far East before their working day ends. Straddling both these time zones has proved valuable for practitioners bringing together international investors who may be as far part as the US and Japan.
Although the Islands are not part of the European Union they seek to comply with many European standards in relation to financial services and as a result they have obtained international recognition for their co-operative stance in meeting the highest international standards of corporate governance and regulation. In fact the Islands are consistently recognised as mature and well regulated jurisdictions by bodies such as the IMF, the OECD and the Financial Action Task Force. They have been able to exceed all the relevant international standards for financial stability and transparency expected from a modern international finance centre. The Islands were in the first group of international jurisdictions to be included on the OECD ‘white list’ of locations which have substantially implemented the internationally agreed tax standards in 2009. The Channel Islands have also committed to the principle of information exchange for a number of years and have recently been engaged in an extensive programme of tax information exchange agreements with leading nations in the G20, thus highlighting their commitment to transparency and global co-operation.
The regulation regimes have adapted to the needs of the market place when required. For example, when competition for alternative investment funds business intensified several years ago, both jurisdictions were quick to introduce regulations which streamlined the approval process for funds.
It has been a hallmark of the Channel Islands that they have been able to evolve and tailor their financial services to meet the demands of the international marketplace. The Channel Islands small size is an advantage since it enables a close working relationship between government representatives and finance industry practitioners to be fostered, which in turn creates a positive commercial business environment in which to develop new products and services.
Equipped with a skilled workforce of more than 20,000 people, the islands remain leading providers of trust and wealth management activities, insurance services, corporate and private banking, they offer a comprehensive range of fund industry services, together with corporate governance and other management services for investment entities. The diverse range of specialist business provided to both corporate and private clients is testament to the strategic importance of the Channel Islands in global finance.
PR-120411.pdf