HSM Corporate Services
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 Read more +
The Cayman Islands Ministry of Financial Services on 18 July 2018 released a draft Bill for discussion purposes relating to amendments to the Securities Investment Business Law (“SIBL”). The proposed Bill seeks to address: Deficiencies in the Cayman Islands regulatory Read more +
The HSM Group is enhancing its legal services with a new Head of Corporate & Commercial law. Mr. Peter De Vere. Peter joins HSM from another top-tier law firm in the Cayman Islands and specialises in all areas of Cayman Read more +
The HSM Group is proud to welcome Ms. Hilary Brooks to its growing practice. Ms. Brooks recently joined HSM and will be primarily focused on Corporate and Commercial law. She will also be practicing in the areas of property and 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 notifying them of the AML Officer appointments (listed above). The deadline is now 31 December 2018.
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.
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.