Advisers to do AML due diligence for fund managers
Under the AML rules, each reporting entity must have due diligence processes in place to screen each customer for money-laundering and terrorism-financing risk.
The exemption aims to streamline the situation where reporting entities deal with each other and potentially both have to conduct due diligence on the customer to meet their requirements under the AML rules. It would allow for simplified due diligence instead.
The Ministry of Justice says the exemption would be invoked where AFAs are investing, administering or managing funds on behalf of others, such as with DIMS services. “Reporting entities entering into business relationships with these AFAs would be able to rely on the exemption.”
Bradley Kidd, of Chapman Tripp, said the exemption would be welcome. “It recognises there’s no utlity in having two people doing [customer due diligence]. Only people who genuinely have those people as customers should be doing it.”
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