Consultation Paper No.8 2016: AML/CFT guidance for Funds and Fund Operators

Summary

This is a Jersey Financial Services Commission consultation paper seeking industry feedback on a proposal to add a new Funds Section to the AML/CFT Handbook. The proposal does not change any existing statutory or regulatory AML/CFT obligations for funds and fund operators; it aims to add clarifying guidance on how those existing requirements apply, including on customer identification, beneficial ownership and risk assessments.

• Scope: Applies to all Funds and Fund Operators, whether regulated under the Regulatory Laws or not, and to Registered Persons.
• Content of the new guidance: Covers who is the Customer for a Fund or Fund Operator, Business and Customer Risk Assessments, application of Article 3 of the Money Laundering Order (including the Three Tier Test for beneficial ownership and control), and specific topics such as unit trusts, passive investors, multiple layered entities, nominees and investment managers, deferred verification, failure to complete identification measures, trigger events, and enhanced CDD measures.
• Alternative CDD approaches discussed: Guidance on when a Relevant Person may not need to undertake all CDD Measures itself, such as through simplified identification measures, reliance on an Obliged Person, or appointing a delegate.
• Consultation mechanics: Comments invited via a Response Template, to be sent to the Commission or, for an industry-coordinated response, to Jersey Finance Limited, by 25 November 2016.
• Next steps: Subject to responses received, the Commission intends to issue the final Funds Section in the AML/CFT Handbook in Q1 2017.

Because this is a consultation on guidance rather than a change to binding rules, it does not itself create new legal obligations; readers should note that responding is voluntary and the described requirements reflect existing statutory obligations under the Money Laundering Order and related laws, restated for clarity.

Applies to

Funds, Fund Operators, Registered Persons, Relevant Persons carrying on financial services business (regulated and non-regulated)

Deadlines

• 25 November 2016: Deadline for responses to the consultation paper to be sent to the Commission (Kate Berry) or to Jersey Finance Limited (Thomas Cowsill) for the coordinated industry response.
• Q1 2017: Intended timeframe for the Commission to issue the final new Funds Section of the AML/CFT Handbook, subject to consultation responses.