VASP FAQs Update (2022-05-02)

Summary

This is a CIMA general industry notice from 2 May 2022 that updates the published FAQs for Virtual Asset Service Provider (VASP) registration/licensing under the VASP Act, aimed at improving the completeness and quality of applications so as to reduce processing delays.

VASP Registration Requirements

Documents and fees: Sets out in detail the documents and fees required to register a VASP under section 6(1) of the VASP Act.
Business plan: Describes the elements expected in a comprehensive business plan.
Due diligence: Specifies the due diligence information required for major shareholders (10%+), directors and officers.
Group structure: Specifies the group/organisational structure information that must accompany an application.

FATF Travel Rule

The notice also explains the FATF Travel Rule as it applies to VASPs and confirms that Part XA of the Anti-Money Laundering Regulations, which contains the Travel Rule identification, verification, record-keeping and related obligations for virtual asset transfers, commences on 1 July 2022.

Existing VASPs: VASPs already registered or in the process of registering were required to notify CIMA by 31 March 2022 of how they would comply with the Travel Rule provisions.
New applicants: New applicants must now embed their Travel Rule compliance approach within their AML/CFT policy submissions in the REEFS application (Schedule E of form APP 101-84).

Overall, the document is informational/clarificatory in nature (an FAQ update) but it reiterates existing statutory and regulatory obligations rather than creating wholly new ones, and it flags one already-passed reporting deadline (31 March 2022) alongside the commencement date for Part XA AMLR (1 July 2022).

Key obligations

VASPs applying for registration/licence under section 6(1) of the VASP Act must submit a complete REEFS application (APP-101-84 and AIR-157-84), blockchain address list, shareholder details (10%+) with completed personal questionnaires, CIO/CISO information and CV, cybersecurity policies, AML/CFT policies, a comprehensive business plan, transaction flow charts, outsourcing arrangement details, and the applicable fee before the Authority will begin processing the application.
The business plan submitted must at minimum cover business description, products/services, two years of standalone financial statements plus projections, physical location, customer base, delivery channels/marketing, corporate governance, staffing/org chart, and details of affiliate/outsourcing contracts and their regulatory status.
For major shareholders (10%+), directors and officers, applicants must supply certified academic/professional qualifications, police clearance or affidavit of no convictions, a completed personal questionnaire, two character references, one financial reference, an updated CV, certified photo ID, and a completed Declaration of Source of Funds/Source of Wealth with supporting evidence.
Applicants must follow CIMA's Regulatory Procedure – Assessing Fitness and Propriety to avoid delays in due diligence.
VASPs must submit a full group structure chart showing ultimate beneficial owners, the regulated status of group entities, and details of services provided by related entities.
Originating VASPs must obtain and hold required originator and beneficiary information on virtual asset transfers (the Travel Rule) once Part XA of the Anti-Money Laundering Regulations takes effect.
All VASPs registered or in the process of registering were required to submit their Travel Rule compliance arrangements (policies, procedures, resources) to vaspinfo@cima.ky by 31 March 2022.
New VASP applicants must indicate in their application how they will comply with the Travel Rule, attaching this as part of their AML/CTF policy submission via REEFS (Schedule E of form APP 101-84).

Applies to

Virtual Asset Service Providers (VASPs)

Deadlines

31 March 2022: Deadline for VASPs already registered or in the process of registering with CIMA to submit details of their Travel Rule compliance arrangements to vaspinfo@cima.ky.
1 July 2022: Commencement date for Part XA of the Anti-Money Laundering Regulations, containing the Travel Rule requirements for VASPs.