Notice - Sector-Specific AML/ATF Guidance Notes for Investment Business - Consultation (2016-10-06)

Summary

This is a BMA notice, dated 6 October 2016, opening a 30 day public consultation on draft sector-specific AML/ATF guidance (Annex III) for the investment business sector. The draft annex supplements the Authority's main AML/ATF Guidance Notes and is intended to apply those notes to the specific risk profile of investment business providers, investment funds and fund administrators; it does not replace the main guidance.

• Scope: Covers persons designated as AML/ATF regulated financial institutions (RFIs) under Regulation 2(2)(b), (e) and (h) of the Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008, including investment business providers, fund administrators, investment fund operators, and non-licensed persons (NLPs)/independent professionals.
• Topics addressed in the draft: Senior management responsibilities and internal controls; links between investment business, insurance and trust business; use of intermediaries and third-party service providers; ownership/management/employee screening; risk-based approach to customer due diligence; ML/TF risks specific to investment business; suspicious activity reporting; record-keeping; and sector-specific risk factors.
• How to comment: Comments should be emailed to policy@bma.bm with the words 'AML/ATF Investment business' in the subject line.

Because this is a consultation on a draft, the guidance is not yet final; however it largely restates and elaborates obligations RFIs already have under existing Bermuda AML/ATF Acts and Regulations (e.g. POCA 1997, the SEA Act 2008, and Regulations 12, 16 to 19), so firms should review the draft against their current AML/ATF policies and controls.

Key obligations

• Stakeholders wishing to comment on the draft sector-specific guidance must submit comments to policy@bma.bm, including the words "AML/ATF Investment business" in the email subject line, within the 30 day consultation period ending 4 November 2016.
• Senior management of RFIs conducting investment business must ensure compliance with the Acts and Regulations, identify and mitigate ML/TF risks, appoint a Compliance Officer and a Reporting Officer, screen employees, and audit and test AML/ATF policies, procedures and controls at least once per calendar year, as reiterated in the draft guidance.
• RFIs conducting investment business must apply a risk-based approach to customer due diligence, reliance on intermediaries, ongoing monitoring, and detection/reporting of suspicious activity.
• RFIs with branches, subsidiaries or representative offices outside Bermuda must communicate their AML/ATF policies to those entities and ensure they apply measures at least equivalent to Bermuda's requirements.

Applies to

investment business providers, investment funds, fund administrators, non-licensed AML/ATF regulated financial institutions (NLPs), independent professionals

Deadlines

• 4th November 2016: End of the 30 day consultation period; deadline to submit comments on the draft sector-specific AML/ATF guidance notes for investment business to policy@bma.bm