ALFI Guidelines on AML-CTF to the fund industry have been issued
On May 2021, the revised ALFI Guidelines on AML-CTF have been issued.
This publication provides awareness on AML-CTF obligations applicable to the funds and also a clear view on the responsibilities of the professionals:
- To develop and maintain an effective, well-documented AML-CTF program complying with law and regulations adequate to its ML/TF risks
- Even if they rely on other professionals assisting the fund to fulfil with its AML-CTF obligations, they need to detail the performance of such tasks and formalise in writing including roles and responsibilities
- The ultimate responsibility remains with Board of Directors of the fund
The professionals of the fund industry have the following obligations concerning AML-CTF
- Implement risk appetite framework
- Assess AML-CTF risks
- Fomalise in written an AML-CTF policy
- Perform oversight, it means a due diligence by understanding, assessing and controlling the AML-CTF risks linked to services provided to the fund
The main points of attention to outline are:
- Each professional of the fund industry has its own AML-CTF risk appetite framework, risk assessment and Policy defined
- The obligation to appoint a RR, “Responsable du Respect des obligations” and a RC, “ Responsable du Contrôle du respect des obligations”
- The Registrar and Transfer Agent complies with its AML-CTF obligations, based on services provided in the outsourcing agreement: identification of investors, name screening towards Targeted financial sanctions (TFS), transaction monitoring and review of investors’ file
- The Portfolio manager performs the investment management activities and it can include the AML-CTF of assets
- The appointed depositary complies with its own AML-CTF obligations: identification and verification of identity of the fund, its beneficial owner(s), name screening towards Targeted financial sanctions (TFS) and Proliferation financing (PF), and cooperation with the competent authorities
- There is a variety of intermediaries and different approach on these professionals involved in the marketing and distribution of the fund. It means two levels of due diligence and variable degree of intensity on the application of enhanced due diligence measures are applied
- Some clarification is provided concerning the question who is the customer in the fund industry
- Due diligence is performed on investors and on assets
Please refer to the ALFI Guidelines on Reviewed Practices and Recommendations aimed at reducing the risk of money laundering and terrorist financing in the Luxembourg Fund Industry, May 2021.