The FCA Thematic Review of anti-money laundering and anti-bribery and corruption systems and controls in asset management companies was published recently. The FCA assessed 22 firms including wealth and asset management firms, fund administrators, and platform firms.

The FCA Thematic Review focused on:

• AML systems and controls (including account opening, transaction monitoring, and suspicious activity reporting to mitigate money laundering risks)
• ABC systems and controls (including the use of business introducers, third party payments and gifts/entertainment arrangements).

To update you on the latest developments on the implementation of the Alternative Investment Fund Managers Directive (AIFMD), coming into force with effect from 22nd July 2013, the Malta Financial Services Authority (MFSA) has published self-assessment questionnaires on its website for fund managers and self-managed collective investment schemes.

Depending on the business model, Alternative Investment Fund Managers (AIFM) are requested to determine, by completing the questionnaires, whether it can categorized as 1) an AIFM which activities require it to be re-licensed or opts to be licensed as an AIFM in terms of the AIFMD or 2) an AIFM which does not intend to opt to be licensed as an AIFM in terms of the AIFMD.

Existing license holders have a one year transitional period with effect from 22nd July 2013 so as to register as an AIFM not needing to be re-licensed or to apply for a full AIFM license and satisfy the requirements of the AIFMD.

With the introduction in December 2012 of the “BVI Approved Manager Regime”, a new regulatory ‘light’ regime for managers incorporated in the BVI, and a simplified and faster application process, it is expected that this new regime will be attractive to start-up and existing mid-size managers. Prior to the new regulatory regime, all BVI managers of open-ended funds and closed-ended funds were required to be fully licensed under the provisions of the Securities and Investment Business Act, 2010 (SIBA) and therefore complying with the BVI’s Regulatory Code and anti-money laundering regime resulting in a disproportionate amount of regulatory compliance costs when comparing start-up and mid-size managers to those managing larger sums of investor money.

As you are probably aware, as per 1 April 2013, the FSA is replaced by two new regulatory bodies:

• The Prudential Regulation Authority (the PRA), which will be a subsidiary of the Bank of England, will be responsible for promoting the stable and prudent operation of the financial system through regulation of all deposit-taking institutions, insurers and investment banks. (www.bankofengland.co.uk/pra/Pages/default.aspx)
• The Financial Conduct Authority (the FCA), will be responsible for regulation of conduct in retail, as well as wholesale, financial markets and the infrastructure that supports those markets. The FCA will also have responsibility for the prudential regulation of firms that do not fall under the PRA’s scope. (www.fca.org.uk)

We want to emphasize that the FSA website is no longer updated, please use the new websites in case you are looking for information.