– CIMA imposes hefty fines on asset management company for AML Regulation breaches
Under the Cayman Islands Beneficial Ownership (Companies) Regulations (Revised) and the Cayman Islands Anti-Money Laundering Regulations (Revised) (AML Regulations), certain Cayman Islands companies are required to maintain details of their beneficial owners and applicable legal entities on a secure, non-public centralised registry held by the Registrar of Companies (Registrar)1. Cayman Islands companies which fall into scope, must ensure that the beneficial ownership information held by their corporate services provider complies with the above regulations and is kept up to date.
Highlighting the importance of this in the current climate, the Cayman Islands Monetary Authority (CIMA) has recently imposed USD365,000 in administrative fines on Sterling Asset Management International2 for breaches of the AML Regulations. The company failed to identity ultimate beneficial ownership, failed to verify source of funds and the nature of certain business relationships, did not apply enhanced due diligence when necessary, and failed to conduct appropriate sanctions checks.
These breaches were found during an onsite inspection as a result of similar issues being identified during a previous AML audit. This case emphasises the value of effective compliance and the importance of registered entities having effective anti-money laundering policies and procedures in place.
At Marbury, we have a Compliance Services team dedicated to ensuring that entities remain compliant with relevant legislation and regulations across all jurisdictions, however clients are reminded to inform their relationship manager as and when beneficial ownership changes take place so that the information as maintained by the relevant registry is accurate and up-to-date. Further to the Cayman Islands beneficial ownership regime, the Registrar has now begun issuing penalties and warning letters to companies that fail to maintain accurate beneficial ownership information.
Should you require any further Compliance Services, Marbury can assist with the drafting and implementation of a compliance manual and framework, policies, procedures and controls. Depending on scope, Marbury may also be able to assist with the appointment of officers (including money-laundering and compliance), maintenance of anti-money laundering registers, management of suspicious activity etc.
Please reach out to your usual contact person on the Marbury team or info@marburys.com for further information.
[1] See for details of the specific requirements, see our past article on the Cayman Islands beneficial ownership regime.
[2] See the CIMA notice for further details.