US$ 24,000

The Cayman Islands anti-money laundering and countering terrorist financing (AML) regime requires mutual funds to maintain AML procedures as appropriate to the size of the fund.

The requirements include: 

• Adoption of a risk-based approach to monitoring investors and financial activities, together with adequate systems to identify risk (including checks against all applicable sanctions lists) in relation to persons, countries, and activities of the mutual fund; 
• Observance of the list of countries that are non-compliant, or do not sufficiently comply, with the recommendations of the Financial Action Task Force; 
• Procedures for:
  • investor identification and verification 
  • risk-management;
    record-keeping; 
  • suspicious activity reporting;
    monitoring, and testing the systems for, compliance with AML and proliferation financing regulatory requirements; and 
  • Other internal control and communication procedures (eg a risk-based independent audit function)

Securities Investment Business Law (SIBL) defines “securities” as:

• Shares or stock of any kind of the share capital of a company (endnote)
• Debentures, loan stock, bonds, certificates of deposit, and any other instrument that creates or acknowledges debt (excluding various banking and monetary instruments e.g. cheques, mortgage instruments, and land charges).
• Warrants and other instruments that allow the holder to subscribe to certain securities
• Certificates or other instruments which confer contractual or proprietary rights
• Options on any security and on any currency, precious metal or an option on an option
• Futures
• Rights under contracts for differences (e.g. cash-settled derivatives such as interest rate and stock index futures, forward rate agreements and swaps)