Cayman Islands – Anti Money Laundering Regulations – Deadline 30 September

Cayman Islands – Anti Money Laundering Regulations – Deadline 30 September


Cayman AML – Augentius’ Solution for Unregulated Funds

30 September 2018 is the last day for existing Cayman funds to comply with the requirements of the Cayman’s Anti-Money Laundering Regulations 2017 (Amended 2018) which extended the coverage of the previous regulations on the subject to also capture unregulated funds.

This impacts Boards of fund managers operating unregulated Cayman funds.

The New Regime

The practical impact for the Board of fund managers of unregulated funds is that they have new sets of obligations and procedures around Anti-Money Laundering/Combatting the Financing of Terrorism, (“AML/CFT”) which extends beyond just undertaking CDD/KYC on their investors.

These include:

  • Implementing a corporate governance framework that addresses AML/CFT requirements and demonstrates that the Board have control and oversight of their business.
  • The appointment of a competent Money Laundering Reporting Officer (“MLRO”) and Deputy Money-Laundering Reporting Officer (“DMLRO”) as a part of a formal AML/CFT reporting process to competent authorities integrated into the fund manager’s activities.
  • The appointment of an Anti-Money Laundering Compliance Officer (“AMLCO”) to maintain AML/CFT policies and procedures and undertake ongoing review of their effectiveness to assist the Board who remains ultimately responsible.
  • Adoption of a risk-based approach in managing AML/CFT Risk requiring identification, assessment and mitigation of AML/CFT risk associated with business relationships, including formalisation of an AML/CFT risk appetite.
  • Ongoing monitoring of Investors, including screening and periodic risk assessment.
  • Maintenance of AML/CFT and Compliance records on Investors and associated business counterparts.
  • Director / Employee AML/CFT training (as necessary).
  • Director / Employee risk screening.

It should be recognised that the Board cannot avoid their obligations and remain responsible irrespective of delegation, outsourcing and contracting arrangements.

The Augentius Solution

Augentius, as a fund administrator operating in a number of regulated jurisdictions, is experienced in delivering AML/CFT regulatory solutions and managing the ever-changing regulatory environment.

Having undertaken an evaluation of the market and our clients’ needs, Augentius has developed a group-wide solution for its clients with its preferred service provider.

As part of an AML/CFT administration package, Augentius and its preferred service provider are able to provide individuals to hold the MLRO, DMLRO and AMLCO positions and the necessary AML/CFT framework described above (“the Cayman AML Framework”) along with Investor Due Diligence services.

Where Augentius provides Investor Due Diligence services on Cayman structures a standard information pack can be provided setting out how Augentius and its preferred service provider will assist the client with their new obligations to provide a complete solution.

A standard introduction pack to the preferred service provider and details on their service and delivery can be made available on request along with contact details of the relevant personnel at the provider who will be happy to explain the offering.

The use of Augentius’ preferred service provider resolves the complexity of identifying a suitable third party, the basis of engagement between the parties and its implementation. Our solution is competitively priced and straightforward to arrange.

Augentius’ preferred service provider arrangement is subject to Augentius being engaged to undertake the administration of the fund and is not separately available.

Effective dates

For Funds existing before 1 June 2018, the deadline for compliance to the new requirements is 30 September 2018.

Where Funds have been registered on or after 1 June 2018 the requirements are effective immediately.

Next Steps

If you want to know more about Augentius’ solutions, please reach out to your usual contact at Augentius.