Dillon Eustace, an Irish financial services law firm, has named two new partners for its new full-service office in the Cayman Islands.

Funds lawyer Matt Mulry and John Fox, who will develop the firm’s commercial litigation practice, have both joined the firm as partners from Prosperity Capital Management and Stenning Associates, respectively. The practice will offer securities litigation, funds establishment, insurance and banking.

“The continued strengthening of Caymans' regulatory regime and its focus on good corporate governance is bringing the jurisdiction more in line with established on-shore practices,” said Mark Thorne, managing partner at Dillon Eustace.

The company also said that it sees the Caymans as an important domicile despite the introduction of the Alternative Investment Fund Managers Directive, which is looking to put hedge funds and other alternative vehicles under EU supervision. While the reform may restrict access to European markets, there is still a huge volume of business focussed outside Europe on which the directive will have little or no impact, Dillon Eustace said.

The directive, due to take effect from 2013, was created in the aftermath of the 2008 financial crisis and has been watered down from its original version, reducing some of the threat that non-EU jurisdictions such as Jersey, Guernsey and the Cayman Islands could be locked out of the large EU market.

Meanwhile, a conference organised by Jersey’s financial sector last week heard that while the directive could have been far worse than the original draft, serious uncertainties linger over how non-EU jurisdictions will fare under it.