Cayman AML Regulation

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The latest update to the Cayman Islands Anti-Money Laundering Regulation is impactful. It means that Cayman funds need to act, and they need to act fast. If you have a Cayman fund structure or are considering launching one, it is important that you fully understand the requirements and associated timelines.

What has changed?

In April 2018 the Cayman Islands Monetary Authority (CIMA), issued a notice to industry members asserting that Cayman domiciled funds will now required to appoint individual’s to act as Money Laundering Reporting Officer (MLRO), Deputy Money Laundering Reporting Officer (DMLRO) and Anti-Money Laundering Compliance Officer (AMLCO) by September 30, 2018.

This latest requirement is a culmination of various updates to the following laws, regulations and guidance notes:

  • The Proceeds of Crime Law (2017 Revision)
  • The Terrorism Law (2017 Revision)
  • Anti-Money Laundering Regulations (2017 Revision)
  • The Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands (December 2017, pursuant to Section 4 of the Monetary Authority Law (2016 Revision)

What does this mean to you?

If you have a Cayman fund, whether regulated or unregulated, you will need to appoint individuals to act in the following roles:

  • AMLCO
  • MLRO
  • DMLRO

The same person can act as AMLCO and either DMLRO or MLRO providing the individual is competent and able to perform both roles efficiently; however the DMLRO and MLRO must be separate people.

What are the deadlines?

Existing regulated and unregulated funds need to implement this change by September 30, 2018.

New regulated funds (launching on or after 1 June 2018) will be required to have these roles already in place at the time of launch.

Master-Feeder structures will require both the Master and Cayman-domiciled Feeders to appoint natural persons to these roles.

Segregated Portfolio Companies (SPC’s) will need to make the appointments at the SPC level which covers all underlying Segregated Portfolios (SP).

Next steps

These roles can be appointed internally or the function can be outsourced to a specialist service provider.

The Cayman Islands entity (your fund’s Directors or equivalent) must conduct a risk assessment of the delegate before entering into an agreement, particularly with respect to country risk if you choose a provider not based in the Cayman Islands.

A formal agreement must be entered into in advance of making the appointment and notifying CIMA.

As a global fund administrator, Apex has the ability to support its clients with Cayman fund structures in compliance with these new Anti-Money Laundering requirements. The local Apex Cayman team deliver robust AMLCO, DMLRO and MLRO solutions to existing clients with services delivered by dedicated, experienced individuals based locally.

If you are an existing Apex client and require further information on what is required and the support services Apex can deliver Click Here to contact the team today.

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