Key Updates For Fund Managers In Asia: Cayman Private Funds And AML Officers

CAYMAN PRIVATE FUNDS LAW: 7 AUGUST 2020 HARD DEADLINE

GOVERNANCE, VALUATION, DEPOSITARY, AUDIT & REGISTRATION OBLIGATIONS: URGENT ACTION REQUIRED

• Immediate action is required
• in order to comply with the new Cayman Private Funds Law (PFL) 2020 and to register your Cayman private fund(s), prior to 7 August, 2020. This deadline will not change.
• In advance of the deadline there are also significant governance, valuation, depositaryand audit requirements contained in the Law with which your private fund(s) will need to be in compliance (the “Requirements”).
• Any Cayman private fund that fails to comply with the Requirements and register with CIMA by the deadline will be in breach of the Law and potentially subject to enforcement proceedings.
• Due to the anticipated volume of newly registering entities and the time needed to ensure compliance with the Requirements (including possible appointment of Directors), we strongly urge you to address this immediately.
• If you manage or operate an entity that might be a Private Fund please contact your usual DMS representative as soon as possible for a consultation with our Regulatory Advisory Team, or send an email to [email protected]

AML OFFICERS – WHAT ARE THE REQUIREMENTS?

All Cayman Funds and SIBL-Registered Persons are required to appoint individuals who are suitably qualified and experienced as AML Compliance Officer (“AMLCO”), Money Laundering Reporting Officer (“MLRO”) and as Deputy MLRO (“DMLRO”).

WHAT ARE THE REQUIREMENTS FOR THE AMLCO, MLRO AND DMLRO

• A natural, autonomous and independent person with sufficient time to perform the role effectively.
• A fit and proper person with demonstrable knowledge and experience.
• Comprehensive understanding of the roles and responsibilities of each function in accordance with Cayman Islands laws and regulations.
• Written internal reporting procedures for suspicious activities and filing of suspicious activity reports with the Cayman Islands Financial Reporting Authority.
• In-depth and regular vigilance and refresher training on all aspects of the AML primary laws and regulations, supervisory and regulatory guidance.
• Documentation and record-keeping.

WHAT IS THE PENALTY FOR NON-COMPLIANCE?

Under the updated Cayman Anti-Money Laundering Regulations (“AMLRs”) any person who contravenes the AMLRs commits an offence and is liable on summary conviction, to a fine of US$625,000; or on conviction on indictment, to a fine and to imprisonment for two years. In addition, CIMA has the power to impose administrative fines for breaches of AML requirements up to US$1.25m.

HOW CAN DMS HELP?
DMS has a dedicated team of AMLCO, MLRO and DMLRO specialists available for appointment. For additional information, please reach out to your usual DMS professional, or contact us below: