HSM Corporate Services
Cayman Islands Government Publishes Beneficial Ownership Transparency Act, 2023
Following the recent removal of the Cayman Islands from the FATF grey list, the Cayman Islands has published the Beneficial Ownership Transparency Act, 2023 to better align the beneficial ownership regime more closely with the Cayman Islands’ anti-money laundering regulations. Read more +
Action Needed for Cayman Companies that Own UK Property
As Russia’s invasion of the Ukraine continues, the United Kingdom has pushed its hunt for Russian Oligarch’s assets into high gear and has fast tracked the Economic Crime (Transparency and Enforcement) Act 2022 (the “Law”) into force. The Law was Read more +
Year-end Company Dissolutions Update and Reminder 2022
As we draw closer to the end of 2022, many clients will be considering their Cayman Islands structures and querying whether any entities are surplus to requirements. HSM’s Head of Corporate and Commercial, Peter de Vere, covers the key points Read more +
HSM Produces Updates to the Cayman Islands Economic Substance Regime
Most clients are now relatively familiar with the Cayman Islands Economic Substance regime requiring real economic substance for certain entities (known and ‘Relevant Entities’) carrying or certain activities (known as ‘Relevant Activities’). Our firm’s previous article on the introduction of Read more +
Time Is Running Out To Make Your Cayman Fund AML Compliant
Pursuant to the Anti-Money Laundering (“AML”) Regulations (2018 Revision) (the “Regulations”), all Cayman Islands investment funds are to designate a natural person to the roles of AML Compliance Officer (“AMLCO”), Money Laundering Reporting Officer (“MLRO”) and Deputy Money-Laundering reporting Officer (“DMLRO”) and CIMA registered entities are to notify the Cayman Islands Monetary Authority (“CIMA”) of the identity of such persons for a Cayman Fund on or before 30 September 2018 31 December 2018.
UPDATE: on 24 September 2018, CIMA announced an extension on the deadline for notification of the AML Officer appointments
Regulated Funds
These funds are still required to formally appoint AML Officers by 30 September 2018.
The required submission of this information via CIMA’s online Regulatory Enhanced Electronic Forms Submission (“REEFS”) portal has been extended until 31 December 2018.
Unregulated Funds
The deadline to formally appoint AML Officers has been extended to 31 December 2018.
There is currently no system in place for submitting this information to CIMA.
New funds registering with CIMA on or after 1 June 2018 will need to appoint persons to the relevant positions as part of the registration process.
A natural person, at managerial level must be appointed as AMLCO, MLRO and DMLRO.
The AMLCO and MLRO may be the same person if said person understands and is able to fulfil both roles. As a result at least two individuals will need to be designated to each fund.
Notifications on the appointments for a Cayman Fund can be done via the REEFS (Regulatory Enhanced Electronic Forms Submission) portal.
What action should you take now?
If your Cayman Fund has not yet made the necessary appointments and your Fund wishes to undertake the various elements required by the Regulations internally then this if fine, however; most entities will in practice delegate this to a suitable service provider.
CIMA has issued guidance on outsourcing in relation to the delegation of any function, including the delegation of AMLCO, MLRO and DMLRO positions to natural persons. Click here to view their guidance notes.
In addition, Cayman Islands “Designated Non-Financial Business and Professions” (which include real estate agents and brokers, dealers in precious metals, dealers in precious stones, firms of accountants and firms of attorneys at law) are now also subject to the AML Regulations and the AML Guidance Notes.
Delegation
A Fund may rely on the AML procedures of an administrator that is subject to the AML regime of an approved country.
The Regulations have repealed the “Schedule 3” list of countries from the former Money Laundering Regulations (2015 revision) and have replaced this with a list of “Approved Countries” as designated by the Anti-Money Laundering Steering Group pursuant to the Proceeds of Crime Law (as Revised).
The current list of Approved Countries includes: Argentine, Australia, Austria, Bahamas, Bahrain, Barbados, Belgium, Bermuda, Brazil, British Virgin Islands, Canada, Cyprus, Denmark, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hong Kong, Iceland, India, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, Liechtenstein, Luxembourg, Malta, the Netherlands, New Zealand, Norway, the People’s Republic of China, Portugal, Singapore; Spain, Sweden, Switzerland, United Arab Emirates, United Kingdom, and the United States of America.
If you are considering appointing a delegate, you will need to take into account the suitability of the administrator and ensure you are satisfied that the minimum standards are equivalent to the AML regime of the Cayman Islands. The Fund will need to demonstrate in writing (typically by resolution of the board of directors) their assessment of the administrator.
CIMA has recently released its list of Frequently Asked Questions (see below) which should be helpful to clarify what is required in relation to Funds.
AMLRs/Guidance Notes (“GN”) – Frequently Asked Questions: Funds
The Cayman Islands Monetary Authority (the “Authority”) outlines here, for your reference, its response to frequently asked questions relating to the AMLRs/GN in relation to funds.
What are the next steps?
For more details and guidance on whether or not your Cayman fund is compliant, contact Peter de Vere (HSM’s Head of Corporate and Commercial) at pdevere@hsmoffice.com.