As discussed in our previous newsletter, The Anti-Money Laundering Regulations, 2017 (the “Regulations”) were brought into force on 2 October 2017 and replaced the Money Laundering Regulations (2015 Revision) (the “Former Regulations”).
One of the most fundamental changes brought about by the Regulations is that the definition of ‘relevant financial business’ (being the trigger for application of the Regulations) has been extended to include “investing, administering or managing funds or money on behalf of other persons”. The result of this change is that unregulated investment entities and finance vehicles (including private equity and closed-ended/unregistered funds) will now be within the scope of the Regulations and required to comply with their terms.
Please see our Guidance Note on Unregulated Funds and the New AML Regime in the Cayman Islands for more information.
In summary, all Cayman Islands investment funds (both registered and unregistered) should now have established written policies and procedures for anti-money laundering and combating the financing of terrorism. In addition, all such entities will need to ensure that they have appointed a Money Laundering Reporting Officer, Deputy Money Laundering Reporting Officer and a Compliance Officer. Such officers will need to be in place for existing funds on or before 30 September 2018. For registered funds, the identity of such officers will need to be notified to CIMA via the REEFS online portal on or before 30 September 2018. We would expect registered funds to already have in place a Money Laundering Reporting Officer and a Compliance Officer but, aside from now needing to also appoint a Deputy Money Laundering Reporting Officer (which may also be the Compliance Officer), the key change is that a specific, named individual must be appointed to such roles (rather than ‘an employee of the administrator’ or similar)) and their details provided to CIMA.
If you would like our assistance in ensuring that your fund is compliant with the Regulations, please do contact us as we are offering a fixed-fee service to our clients for the drafting of an AML & Compliance Manual for their use and reference.
This publication is for general guidance and is not intended to be a substitute for specific legal advice. Advice should be sought about specific circumstances.
If you would like further information please contact: