Warning Letter - Midland Trust Limited (2013-12-23)

Summary

This is a public enforcement notice published by the BVI Financial Services Commission recording a warning letter issued to Midland Trust Limited, a Class 1 Trust licence holder. It sets out six specific regulatory contraventions found by the Commission relating to AML/CFT and general compliance failings; it does not create new rules but documents a completed enforcement action.

• Compliance manual: Failed to establish and maintain a compliance procedures manual meeting the requirements of section 41 of the Regulatory Code, 2009, contrary to section 34(2) of the Financial Services Commission Act, 2001.
• MLRO access and suspicious transaction recognition: Failed to establish mechanisms to recognise suspicious transactions (section 13(2)(d)(ii) of the AML/CFT Code of Practice, 2008) and failed to ensure the MLRO had reasonable access to relevant information (sections 15(c) and 15(d) of the AML Regulations, 2008).
• Risk assessment: Failed to conduct required risk assessments of applicants for business to ensure appropriate monitoring of higher risk clients (section 12 of the AML/CFT Code of Practice, 2008 and regulation 4(2)(d) of the AML Regulations, 2008).
• Staff training: Failed to provide employees with adequate, appropriately frequent training on recognising and handling suspicious transactions (section 48(1) of the AML/CFT Code of Practice, 2008, having regard to regulations 16(1) and (2) of the AML Regulations, 2008).
• Professional indemnity insurance: Failed to maintain the minimum professional indemnity insurance coverage required for a Class 1 Trust licence holder under section 160(2)(e) of the Regulatory Code, 2009.
• Compliance policy adequacy: Failed to ensure its compliance policy was appropriate for the nature, scale and complexity of its business, contrary to sections 20(1) and 21(a) of the Regulatory Code, 2009.

The matter is identified by the Commission as Matter ID BF101113/183. The notice is informational, publicising a past enforcement outcome rather than imposing new prospective requirements on the industry.

Applies to

trust companies, Class 1 Trust licence holders, Trust and Corporate Services Providers