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Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Guidance Notes for the Cayman Islands Monetary Authority (CIMA)

Named Investor Considerations

When dealing with named investors, financial services providers (FSPs) must be aware of certain key considerations to ensure compliance with AML/CFT regulations.

• No third-party funding or payments: Named investors are not allowed to receive any third-party funding or payments.
• Risk awareness: Despite appearing low-risk, named investors are not immune from Money Laundering/Terrorist Financing (ML/TF) risks. FSPs should consider all relevant risks and take a risk-based approach when conducting business with customers.

Vigilance in AML/CFT Compliance

To effectively deter criminals from engaging in ML or TF, FSPs must be constantly vigilant and adhere to the following principles:

• Engagement of senior management: Senior management must be actively engaged in decision-making processes and take ownership of the risk-based approach.
• Staff training: Staff must be adequately trained to identify suspicious activities and use internal reporting systems for compliance with AMLRs.
• Ongoing monitoring: FSPs must regularly review and update their AML/CFT policies and procedures to ensure ongoing compliance.

Establishing a Compliance Culture

FSPs must prioritize the establishment of an effective compliance culture, which is closely aligned with business objectives. This includes:

• Know-Your-Customer principle: The business objectives of customer care are closely aligned with regulatory objectives, such as the Know-Your-Customer principle.
• Open and welcoming approach: All FSPs must encourage an open and welcoming approach to compliance and AML/CFT issues amongst staff and management.
• Effective internal reporting systems: Staff must be able to report suspicious activities or concerns without fear of retribution.