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A Home Office report on the Channel Islands and the Isle of Man has recommended that local legislatures make disclosure of financial information by companies obligatory.
The Edwards Review of Financial Regulation in the Crown Dependencies, released last week, stated that "there is a case for further legislation to prevent potential abuses by settlers and trustees and to ensure proper accountability".
But the report also said that the islands' reputation for secrecy and poor regulation was "quite wide of the mark".
Local commentators welcomed the recommendations. John Webster, former economic adviser to the Isle of Man government said it was a vindication of the authorities' efforts to eradicate the islands' "grey business".
"It's a culmination of 15 years of effort. We have been through the phase of squeezing out dubious business. Over the past ten years we have been very miffed when people have made outlandish criticisms."
Andrew Corlett, senior partner at Isle of Man's largest firm Cains, said islanders were "tired of being preached to", when the Crown Dependencies' regulations surpassed London's in many areas.