Industry is currently being consulted in relation to a proposed new Funds Section to the AML/CFT Handbook. This would not amend any existing statutory or regulatory AML/CFT obligations for Funds or Fund Operators but would provide additional clarification and guidance on certain aspects of the AML/CFT regime.
The aim of the proposed Funds Section is to:
(a) supplement the guidance in the other sections of the AML/CFT Handbook.
(b) reiterate that all Funds and Fund Operators have statutory AML/CFT obligations in relation to their Customer(s);
(c) provide guidance on who is the Customer with respect to a Relevant Person who is a either a Fund Operator or a Fund;
(d) provide practical guidance on conducting Risk Assessments;
(e) provide guidance on how Article 3 of the Money Laundering Order applies to Funds and Fund Operators particularly focusing on beneficial ownership and control and the “Three Tier Test”;
(f) in response to specific areas of complexity highlighted by industry, provide guidance in Unit Trusts, passive investors, multiple layered entities, nominees/investment managers, deferred verification, failure to complete identification measures, trigger events and enhanced customer due diligence measures; and
(g) provide guidance on the circumstances where, although the CDD obligations remain, a Relevant Person may not undertake all CDD Measures themselves.
Responses are to be sent to the JFSC by 25 November 2016.