Carne Group Financial Services "Carne is a leading global provider of independent fund governance and oversight solutions for investment funds of all kinds. Thu, 22 Sep 2016 10:40:40 +0000 en-GB hourly 1 Carne Group Financial Services 32 32 Focus on Asia Mon, 19 Sep 2016 14:07:00 +0000 Read More →]]> Carne is chosen by ICBC Credit Suisse UCITS fund for Management Company services and is also the first third party Management Company to be licensed under RQFII scheme

Focus on a growing Asian market

ICBC Credit Suisse Asset Management (International) Company Limited, the international arm of Chinese asset manager ICBC Credit Suisse Asset Management Company Limited (one of the largest asset managers in China), has partnered with Carne’s independent management company to support UCITS umbrella fund in Luxembourg, the ICBC Credit Suisse ETF UCITS SICAV Fund.

Carne is an established global provider of independent management company services with a decade – long track record of working with UCITS funds in Luxembourg.

Carne provides substance and independent risk management services to funds worth over EUR 20 billion in assets.

ICBC Credit Suisse Asset Management Company Limited is jointly owned by ICBC and Credit Suisse Group AG. The ICBC Credit Suisse ETF UCITS SICAV – ICBCCS WisdomTree S&P China 500 UCITS ETF is ICBC Credit Suisse’s first UCITS-compliant ETF fund.

CSRC Approves Carne’s RQFII License

Carne is the first third party management company in Luxembourg to receive a license from the CSRC (China Securities Regulatory Commission) under the RQFII scheme.

The Quota, currently under approval by the SAFE (State Administration of Foreign Exchange), will be used by ICBC Credit Suisse Asset Management (International) Company Limited for its first UCITS-compliant ETF fund distributed across Europe to provide European investors access to the Chinese Market.

Luxembourg For Finance and the Association of the Luxembourg Fund Industry confirmed at the end of September 2015 after a period of intense consultation within the investment funds community in Luxembourg and with the Supervisory Authorities in mainland China that the Luxembourg quota could effectively be used by third party management companies.

Carne acted swiftly to apply for the license to demonstrate its commitment and to serve its growing client base with a focus on the Asian market.

A message from the CEO

”Carne has a global footprint, with offices in eight key locations around the world. Consequently, we can advise our clients on both local and global solutions for their governance needs. With our focus on the Asian region, we are delighted to have been chosen as strategic partner by ICBC Credit Suisse to meet their requirements.”

Steve Bernat, CEO Carne Luxembourg

Background on the Firm

ICBC Credit Suisse Asset Management Company Limited is the joint venture between the Industrial and Commercial Bank of China (ICBC) and Credit Suisse. The firm is one of the largest asset managers in the mainland China, and the investment specialist dedicated to providing China and RMB asset management solutions within the ICBC Group. Since being established in 2005, the firm has upheld the philosophy of “Value Creation through Prudent Investing”.

As of the end of March 2016, the firm has approximately 570 employees and RMB960 billion assets under management, providing first-class investment management and advisory services for over 13 million institutional and retail clients.


ICBC Credit Suisse Asset Management (International) Company Limited is authorized and regulated by the Securities and Futures Commission of Hong Kong.

This article is targeted at Professional Investors only.

New Carne Appointment to Help Asset Managers Access International Investors, Manage Increased Regulatory Complexity Wed, 14 Sep 2016 14:06:12 +0000 Read More →]]> Doug Lindgren, formerly a senior executive with UBS, joins Carne as CEO North America with a focus on orchestrating Carne’s global fund management services to help asset managers safely grow their businesses.

Carne Group, the leading global provider of fund management solutions to the asset management industry, is pleased to announce the appointment of Doug Lindgren as CEO North America. With over 25 years of experience, Doug adds additional breadth and depth to Carne’s leadership team in the areas of fund governance, fund distribution, product development and risk management.

Prior to joining Carne, Doug was a Managing Director and Global Head of UBS Wealth Management’s platform of investment funds, encompassing hundreds of funds and more than $300 billion in client assets invested across virtually all asset classes and strategies.

Having split his 11 years with UBS between New York City and Zurich, he has extensive experience developing and distributing funds in the U.S., Europe, and Asia as well as other developed and emerging market.

Prior to joining UBS, Doug was a Managing Director at U.S. Trust, where he built and managed their alternative investment business – before that he was President and Managing Principal of Inco Venture Capital Management, a firm managing private equity funds on behalf of institutional investors.

A message from John Donohoe – Carne Group CEO: 

”We are delighted that Doug has decided to join us and believe that his global experience in setting up, managing, and distributing a very broad range of traditional and nontraditional funds across many jurisdictions around the world will prove to be an important asset for Carne and for our clients.”

Doug Lindgren:

”I find that many asset managers are increasingly struggling to grow their businesses outside of their home markets without adding too much regulatory complexity, operational risk or costs. Fortunately, Carne has a great set of fund management solutions which enable asset managers to mitigate these challenges, allowing them to stay focused on their core competencies as they build out their businesses across various jurisdictions.

Although Carne is already well established and growing rapidly, I believe the market dynamics in the asset management industry will continue to create a real tailwind for the company. I am pleased to be joining the strong team at Carne and look forward to being part in its bright future.”

Help For Children announces appointment of Jennifer Collins as a new member to its Global Board of Directors Wed, 03 Aug 2016 09:30:02 +0000 Read More →]]> Jennifer Collins

Jennifer Collins, a director in the Cayman office of the Carne Group, global leader in independent governance for the asset management industry, was recently appointed as a new member to the Global Board of Directors for Help For Children, a global foundation supported by the alternative asset management industry.

Jennifer Collins is a highly experienced Cayman Islands fund director with over 14 years of experience in the investment fund industry. She has a strong knowledge of investment fund structures and their administration having worked with many of the world’s leading asset managers. Jennifer has been an active volunteer with Hedge Funds Care Cayman since 2007 and has served as a Board member for them since 2013.

Commenting on her new appointment Jennifer said ‘”I am honoured to be appointed to the Global board of HFC.  Being involved in the Cayman branch of HFC for the past 9 years has been incredibly rewarding and the difference it has made in our community has been inspiring.  I am very thankful for the Carne Group’s support of my involvement.”

John Ackerley, CEO of the Cayman office of the Carne Group, congratulated Jennifer noting “The Carne Group is very grateful for the work Jennifer has done and continues to do for HFC.  The Carne Group believes in giving back to the communities it operates in and this is a fantastic example of that commitment.”  

Speaking about the appointment of both Jennifer Collins and Mark Salameh (Co-Founder and CEO of Context Summits), Help For Children Executive Director and CEO Renée Skolaski informed the Global Board, “Our newest Board members embody the mission of HFC and bring talent, expertise and energy to the table. We are very fortunate to have them by our side as we continue to make the world a safer place for children.”

Dean Backer, HFC Board Chair, thanked both new members for their interest and willingness to deepen their commitment to HFC. “Your capacity to help us achieve our mission is great and I really appreciate that you have chosen to spend your time and energy with HFC in this way. I look forward to working with you both.”

About Help For Children  

Help For Children (HFC), established in 1998 as Hedge Funds Care, is a global foundation supported by the alternative asset management sector.  Its sole mission is to support efforts to prevent and treat child abuse.  Help For Children raises money and awards grants in 12 major cities in the United States, Asia, Canada, the Cayman Islands, Ireland and the United Kingdom.  HFC is largely a volunteer-driven organization with professionals from the hedge fund and alternative asset management industry serving on the Board and on local committees that plan events and evaluate proposals.  For more information, visit

Carne Cayman announces appointment of new Cayman Islands CEO and strengthening of director team Wed, 13 Jul 2016 15:17:10 +0000 Read More →]]>

‘Carne Cayman announces appointment of new Cayman Islands CEO and strengthening of director team’

The Carne Group, global leader in independent governance for the asset management industry, has announced the appointment of John Ackerley as Chief Executive Officer of their Cayman Islands business.

Mr. Ackerley is a permanent resident of the Cayman Islands having moved there in 1998 and is recognized as a leading Cayman director to funds managed by global investment advisors. Mr. Ackerley joined Carne in the Cayman Islands in 2011 and has just celebrated his fifth year anniversary with the firm.

Mr. Ackerley said “The past five years have been a time of tremendous growth for Carne’s Cayman and global businesses and I am proud to have been involved with that growth. I look forward to continuing to work closely with both our North American team of directors and the wider group across the world to build on what we believe is the most compelling offering in the investment fund governance industry. Our team have shown time and again over the years why we are trusted to provide reassurance to investors worldwide.”

Managing Director of the Cayman office, Peter Heaps, commented “John’s demonstrable ability in providing outstanding leadership has allowed us to strengthen our management team. His appointment as Chief Executive Officer signifies our intention to build upon our success to date and John is well equipped to lead the Cayman team into the next evolution of our business.”

Mr. John Donohoe, Global CEO of the Carne Group, commented “We are delighted to be able to recognize the work John has done since he joined us five years ago and we look forward to continued growth and success, in Cayman and globally. We continue to focus on building our team to deliver on our commitment to progressive governance and enhanced levels of stakeholder reassurance.”

Carne also announced today the strengthening of their team in Cayman with the addition of Mr. Julian Fletcher as an independent director in the Cayman office. Mr. Fletcher was previously a partner in the Investment Funds group at the international law firm Mourant Ozannes, based in the Cayman Islands and prior to that practiced with Shearman & Sterling LLP in New York and Toronto. Mr. Fletcher has over 17 years of experience as a practicing attorney and is admitted in New York, England, the British Virgin Islands and the Cayman Islands.

Commenting on Mr. Fletcher’s addition to the team Mr. Ackerley stated “We are delighted to have another outstanding addition to the team and more so someone of Julian’s caliber and standing in the legal community. This demonstrates our continued commitment to both serving the needs of investors by providing directors with high level expertise and to the continued growth of our Cayman team.”  Mr. Julian Fletcher’s Bio.

“I am delighted to join Carne and their global team of highly experienced industry professionals in providing elevated levels of governance to investment structures for managers globally. Carne’s reputation and ability to deliver global solutions to investment managers were key factors that led me to join the team in Cayman as I embark upon this new chapter in my career.” Commented Mr. Fletcher.

Carne is chosen to provide independent management company services to Luxembourg domiciled DIAM UCITS fund Tue, 05 Jul 2016 15:37:35 +0000 Read More →]]> Carne is chosen to provide independent management company services to Luxembourg domiciled DIAM UCITS fund.

LUXEMBOURG, July 05th 2016:

DIAM International, the London arm of Asian asset manager DIAM Co., Ltd., with over $148bn* assets under management globally, has partnered with Carne’s independent management company to support UCITS umbrella fund in Luxembourg, the DIAM UCITS Fund.

Carne is an established global provider of independent management company services with a decade long track record of working with UCITS funds in Luxembourg. Carne provides substance and independent risk management services to funds worth over EUR 20 billion in assets.

The DIAM Group is jointly owned by Mizuho Financial Group and the Dai-ichi Life Insurance Company. The DIAM UCITS Fund, the DIAM Japan Stock Pick Concentrated Equity Portfolio is DIAM International’s first UCITS-compliant fund, with plans to launch a series of UCITS funds over the coming months.

DIAM International has been servicing clients in the EMEA region for over 30 years and offers specialist Japanese and Asian investment strategies and liquidity solutions to pension funds, financial institutions, endowments and other large institutional and corporate investors in the EMEA region.

Martin Pattinson, Head of Relationship Management, DIAM International commented: “We partnered with Carne as our governance partner because of their recognised expertise in facilitating the launch of Luxembourg UCITS funds and the quality of the ongoing support services they offer. Carne has a first class team of professionals in place in Luxembourg, providing expert governance and oversight services.”

Steve Bernat, CEO of Carne in Luxembourg, said: “Carne has a global footprint, with offices in eight key locations around the world. Consequently, we can advise our clients on both local and global solutions for their governance needs. As independent oversight specialists, we are very pleased to have been chosen by DIAM to meet their requirements.”

Carne’s management company in Luxembourg is available for both UCITS and AIF funds. Carne provides clients with ongoing support for both management company-hosted and stand alone funds.

* As at 31st March 2016


DIAM International is authorised and regulated by the Financial Conduct Authority. This article is targeted at Professional Investors only.

Background on the firm:

DIAM International is the London arm of DIAM Co., Ltd, an Asian asset manager headquartered in Tokyo with over $148 billion assets under management* globally. DIAM is one of the largest Japanese asset managers of Japanese institutional assets, and also provides Japanese and Asian investment strategies to some of the world’s largest institutional and corporate investors. DIAM is a joint-venture between its two parent companies, leading global bank Mizuho Financial Group and the Dai-ichi Life Insurance Company Ltd, Japan’s oldest insurance company. 

Des Fullam, Director in Dublin makes a valuable contribution to a recent ‘Custody and Fund Services Roundtable’ published in the Global Investor Magazine. Fri, 01 Jul 2016 09:30:15 +0000 GIJune2016DublinRT

Shock Brexit Result Leads to Uncertainty for Fund Managers and Investors in Funds Tue, 28 Jun 2016 10:15:09 +0000 Read More →]]> ‘Shock Brexit Result Leads to Uncertainty for Fund Managers and Investors in Funds’

In the wake of the UK’s shock decision to leave the EU there is now huge uncertainty for UK fund managers looking to sell products in the European Economic Union (EEA) and for investors in existing and future funds.

Whilst politicians grapple with the impact of the vote it is vital that UK investment managers move swiftly to reassure their investors that they have a solution for a post-‘Brexit’ world.

Former Commissioner for Financial Stability, Financial Services and Capital Markets Union, Lord Hill – speaking on passporting opportunities post ‘Brexit’ – noted that ‘most approaches that offer access come with free movement of people and I can’t see that flying given the weight of immigration as an issue in the referendum’.

Uncertainty for Investors
If the outlook for managers is uncertain then so too is the outlook for European consumers of UK-managed investment funds, currently distributed under the UCITS or AIFM passporting regimes.

Many investors invested on the basis of its status as a UCITS or an EEA AIF fund. Such status may be a pre-requisite for investment or for investors such as insurance companies as it has the potential to offer a better capital treatment when compared to non-EEA product.

Whilst the UK is likely to remain as a member of the Union for at least the next 2 years, investors make investment decisions on longer time horizons. So will an investor who has purchased a UCITS or an AIF be happy to be a shareholder in a Non-EEA AIF in 3 years time?

UK managers need to move now to reassure and comfort existing and future investors who may now be asking questions such as how ‘future proofed’ is this fund, will there be further costs to me from this fund or will there be tax impacts to come as a result of the change?

Such uncertainty might delay investor decisions as a result of their need to feel that their investments are secured for the future and costs minimised as the ‘Brexit’ fall-out continues.

In addition to impacting funds domiciled in the UK, many UK investment managers will manage AIFs and UCITS domiciled in other EEA jurisdictions such as Ireland and Luxembourg pursuant to the relevant UCITS and AIFM passporting regimes. In a post “Brexit” scenario these management company passports may no longer be available to UK managers and a restructuring of these arrangements may be required.

As well as investors, distributors too will now be assessing the impact on funds as a result of the referendum and managers need to be ready and able to answer those questions.

Options for UK Managers
The world will not stop while the UK negotiates its exit from the European Union or reconsiders its decision to exit – so UK managers now need to consider their options for continued access to Europe and be well placed to deal with questions from existing and prospective investors who have the option to purchase competing products domiciled or managed in the remaining EEA states.

One option that UK managers could choose is to set up a permanent presence in the EEA. However this option comes with considerable cost implications and involves ‘putting boots on the ground’ (acquiring office space and seeking additional regulatory approvals in one of the remaining 27 member states) most likely in Ireland or Luxembourg. While the regulatory requirements today may well resemble those of the FCA today there are no guarantees that they will in 5 years time.

Each Way Bet
An alternative solution is to partner with a UCITS and/or AIFM manager domiciled in one of the remaining member states and operate in an investment management capacity under the manager’s UCITS/AIFM permissions.

Under this scenario the Fund simply appoints an EEA manager to act as the AIFM or UCITS manager and the manager in turn delegates investment management to the UK entity.

This is a structure that is popular with investment managers based outside the EEA in jurisdictions such as the US, Canada, Hong Kong and Australia. If the UK negotiates passport access to the EEA in due course then this structure can remain or be adapted but it will have been achieved at relatively little cost and time.

How Carne Can Help UK Managers to Manage Investor Uncertainty
Carne has vast experience in dealing with these issues and provides our clients with the strength, trust and reassurance that their needs are met even in the most challenging of times. We stand ready to provide advice to investment managers considering their options.

For example, Carne is the only company with established third-party UCITS and AIFM management companies in both Ireland and Luxembourg and can offer ‘plug and play’ solutions where the portfolio management function can be delegated to the UK manager.

Carne is a strong partner with 70+ staff in Luxembourg and Dublin dedicated to providing management company solutions and can assist with the set up of your own management company in both Luxembourg and Dublin and provide directors and designated directors for the substance you would need.

We are trusted to oversee funds for many of the world’s leading investment managers (including a number currently domiciled in the UK) meaning that we have the experience to support UK managers through these uncertain times.

With proper planning and support the future need not be as unclear as it currently seems. Working with the right partner it might even create hitherto unforeseen opportunities.

Any member of our team in Carne is happy to take a call or sit down with you and answer any questions you may have about how to manage the current uncertainty and build a more secure future for your investors.

There are no concrete answers to all of the uncertainties caused by the ‘Brexit’ result but Carne can help smooth the way when it comes to managers having conversations with existing (or new) investors in existing funds or new investors for new funds.

Carne embraces an innovative future for our clients with an important new appointment Thu, 05 May 2016 13:44:24 +0000 Read More →]]> Carne welcomes Pascal Dufour as Global Chief Technology and Innovation Officer. Pascal will have responsibility for Carne’s rapidly evolving technology platform and for innovating new and exciting products designed to meet the growing needs of our global asset management clients. Through this appointment Carne continues our commitment to the highest standards of service and our values of Trust, Strength and Reassurance for our clients.

Pascal is yet another example of Carne attracting the best of senior talent in the industry for our growing team of global experts. Pascal joins from Lemanik Asset Management where he was Managing Director and Member of the Executive Committee. Prior to that he held Management positions in Multifonds and RBC where he focused on product strategy, processes and technology.

John Donohoe, CEO of Carne Group, said: “Pascal and Carne’s mission is to assist our clients with their on-going challenges including increasing global distribution, extending their product ranges into higher margin alternative products and cost effectiveness. In a rapidly evolving asset management industry, Pascal’s experience will be invaluable.”

Pascal Dufour added: “I’m so pleased to join the only Fund Governance provider with a truly global footprint. I firmly believe that only providers who deliver multi-asset and multi-jurisdictional solutions to the asset management community will be able to succeed in today’s global business.”

Carne was established in 2004 and is the pre-eminent provider of independent fund governance and Management Company solutions. Carne employs 100 people worldwide, serving 400 clients.

Gender diversity on fund boards – addressing the gap Wed, 25 Nov 2015 14:32:34 +0000 Read More →]]> The issue of a lack of female directors on corporate boards has risen up the regulatory and political agenda recently, and managers of public money in particular are focusing on the issue of diversity on fund boards. A recent article published by FT Ignites has pointed out that women currently hold just 10% of the directorships on the boards of Europe’s 30 largest cross-border funds (this figure rises to 13% when the directors of management companies are included).

Analysis by BoardIQ of 1,098 directors on 145 fund boards found only 20% of boards had a female director. Carne’s own experience of board composition broadly supports this finding.

To continue the debate, Carne recently hosted an interactive and lively seminar in front of a full house in Luxembourg, where a panel of senior executives addressed some of the core issues facing fund boards and their stakeholders when it comes to tackling the widening diversity gap between the corporate boardroom and the fund sector.

Initiatives to increase female board representation are varied, including voluntary targets, quotas, and more corporate transparency. Gender diversity also varies widely from jurisdiction to jurisdiction, with the Scandinavian countries leading the way. In some important offshore fund jurisdictions data is still currently unavailable and it remains difficult to build an accurate overall picture of gender diversity on offshore or cross-border fund boards and management company boards.

Barry O’Dwyer, Head of EMEA Funds Governance at BlackRock, told the Carne seminar that “a fund is a product with a fully delegated operating model and is therefore not comparable with a corporate trading entity. Diversity in a fund board context is more about competencies and skills than just gender. From a pure governance point of view, what is needed for a fund board is a structured analysis of the competencies and skills required for that particular product. Diversity of thought is paramount for an effective fund board.”

It was generally felt that expanding the size of the board to accommodate female directors smacks of tokenism and does not help to improve good governance. Instead, turnover of directors and succession planning should be used as tools to increase diversity.

Susanne Van Dootingh, Head of European Regulatory Strategy at State Street, said that it was important for fund management organisations to address gender imbalances, particularly at senior levels: “It will take time to achieve, but if you don’t actively promote it, it won’t happen. Internal talent is key, as we have a fiduciary duty to ensure we get the best candidates on boards. If we can increase the number of women in the pool of potential directors, we will go some way to fixing board imbalances.”

What are the advantages of a more diverse board? In short, larger investment managers and investors regularly note that a more diverse board is a more effective board, encouraging more debate and helping to strengthen corporate governance.

“Mixed boards work better,” ALFI Chairman and Conducting Officer at Franklin Templeton, Denise Voss, told the seminar in Luxembourg. “It is hard to prove quantitatively, but they contribute to a more balanced, mature discussion.”

The fact remains, however, that women are underrepresented on fund boards, despite a more diverse gender composition within the asset management industry overall. This is not, sadly, reflected at senior levels.

Tracey McDermott, Director of Carne and Independent Fund Director said: “It seems that no-one here is a fan of quotas, but there is an issue, or questions need to be asked, when the graduate hiring take-on is split 50/50 but then the percentage of women in the workforce starts to taper off as we move through the echelons of the organisation to senior management and executive level.”

Fewer women are attaining the most senior executive roles and it was felt that asset managers need to review their own talent pipelines as not enough women are reaching or staying with the company long enough to reach, top level management positions.

“Women are technically competent, but the asset management industry has a strong male bias,” said Kerry Nichol, Asset Management Partner with Ernst & Young in Luxembourg. “We need CEO buy-in here. The status quo is changing, for example with more women on the boards of management companies, but women need to make more noise if they are to get noticed at senior levels within the industry.”

Rita Knott, Director of the Female Board Pool Initiative for Luxembourg and Germany, added: “Directors on existing fund boards can help to be agents of change within their organisations, but more women must put their hands up for these roles. Women need to move away from this ‘imposter syndrome’ and aspire to more senior stretch roles within organisations in order to enter the pool of potential directors.”

Unconscious bias also prevails in the appointment process for fund directors, where directors of a similar background and personality to senior executives will be chosen for board positions. Invariably, most if not all will be male. The fact that one woman might be available on a menu of 10 potential directors already stacks the odds.

This is not to argue for positive discrimination, but to point out that CEOs and product development managers do need to be aware that their choices can be influenced by other factors than just the quest for the best skill set on a board. It was generally felt that most are indeed aware, and that perhaps the next step is hold them accountable – this is where the contentious issue of quotas comes to the fore. What was universally acknowledged however was that while female directors should be chosen first and foremost for their ability as a director and the skillset that they can bring to the board, the need to step back and objectively address the current make-up of boards needs to be addressed and that the advantages of board diversity cannot be ignored.

For further information, please contact Tracey McDemott or call Carne +352 2673 2333.

Central Bank of Ireland Report on Anti-Money Laundering/Countering the Financing of Terrorism and Financial Sanctions Compliance in the Irish Funds Sector Fri, 20 Nov 2015 14:51:19 +0000 Read More →]]> On 18th November 2015, the Central Bank of Ireland (the “Central Bank”) published a report on Anti-Money Laundering/Countering the Financing of Terrorism (“AML /CFT”) compliance following its AML themed inspections in the Irish funds sector. The Report sets out the expectations of the Central Bank in relation to AML/CFT and Financial Sanctions (“FS”) for Funds and Fund Service Providers in Ireland.

The Report is based on on-site inspections carried out by the Central Bank over the course of 2014, supplemented by Risk Evaluation Questionnaires completed by Funds and Fund Service Providers and submitted to the Central Bank for assessment.

Head of Anti-Money Laundering at the Central Bank Domhnall Cullinan said:

Latest figures show that Irish domiciled funds have a net asset value of almost €1.8 trillion, making the Irish funds industry a significant part of the Financial Services sector. Any business with such a large variety and amount of customers, high values and volumes of transactions and a cross border nature is attractive for money laundering/terrorist financing.

The Central Bank acknowledges that many firms had responded positively to previous Central Bank communications but, as the report identifies, more work is required by firms in Ireland to effectively manage money laundering/terrorist financing risk. The Central Bank expects all Funds and Fund Service Providers to carefully consider the issues raised in the report, and to use the report to inform the development of their AML/CFT and FS frameworks.

Following the publication of this report we recommend that Funds and Fund Service Providers carry out a gap analysis between their existing practices, policies and procedures and the recommendations of the Central Bank.

Outlined below are some of the key observations that may impact Funds and/or Fund Service Providers.

Risk Assessment

An assessment of Money Laundering/Terrorist Financing risk exposure should be carried out and include all relevant risk categories (such as country/geographic risk, industry risk, customer risk, product risk and channel/distribution risk). The risk assessment should be reviewed and approved periodically (at a minimum annually). Appropriate controls should be put in place to mitigate any risks identified.

Monitoring of Service Providers

While a Firm may outsource certain parts of its AML/CFT activities, the Firm remains ultimately responsible for ensuring compliance with the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“CJA 2010”). Oversight should include a review of the service provider’s full policies and procedures and appropriate assurance testing of any AML/CFT functions performed. The service provider should provide the Fund Board with quantitative and qualitative data including

reports on the functions carried out and regular management information.

Investor On-Boarding

The Central Bank identified a number of issues relating to investor on-boarding including:

  • Appropriate evidence to support the application of SCDD not being retained on file.
  • Fund Boards not retaining adequate control over approval of new PEP relationships.
  • Deficiencies in the on-boarding process of PEPs, including the failure to sufficiently identify, verify and document Source of Funds and Source of Wealth.

 Ongoing Monitoring of Customers

Section 54(3)(c) of the CJA 2010, requires that designated persons adopt measures to keep documents and information relating to customers up-to-date. A risk-based approach must be documented and adopted to define refresh cycles to determine the frequency at which Customer Due Diligence (“CDD”) information must be renewed.

Discontinuance of a business relationship

The Central Bank expects that policies and procedures set out the circumstances under which a Fund would discontinue an existing business relationship due to an investor’s failure to provide the required or updated CDD documentation or information, within the required timeframe. The report makes a clear distinction between Section 33(8)(a) (ceasing the provision of services) and Section Section 33(8)(b) (discontinuation of a business relationship) of the CJA 2010.

Reliance on Third Parties to Undertake Due Diligence

When placing reliance on third parties to undertake due diligence, policies and procedures should set out an approach with regard to the identification, assessment, selection and monitoring of third party relationships, including the frequency of testing of activity performed by such third parties. Where routinely relying on checks carried out by a third party, regular assurance testing should be conducted to ensure data can be retrieved quickly and without undue delay and that the quality of the underlying documents obtained is sufficient and that there are no gaps in customer records which cannot be readily explained.

AML/CFT and Financial Sanctions Systems

The Report refers firms to the “Report on AML/CFT and FS in the Irish Banking Sector” which states when utilising systems in certain areas to facilitate the management and monitoring of Money Laundering/Terrorist Financing risks and Financial Sanctions, the Central Bank expects that firms to conduct regular IT assurance testing to include general controls on automated AML/CFT/FS systems, screening and filtering systems and data sources used to feed AML/CFT and FS systems. It further states that procedures commonly fail to contain sufficient detail with regard to the grounds for discounting a potential FS match and the level of investigation required for each match.

How Carne can help

The report states the MLRO is responsible for ensuring that measures to combat Money Laundering/Terrorist Financing within the firm are effective. The MLRO should have sufficient AML/CFT knowledge and sufficient seniority, to ensure the independence and autonomy of the role is maintained regardless of whether the MLRO also acts as PCF 15, Head of Compliance with responsibility for Anti-Money Laundering and Counter Terrorist Financing Legislation.

Carne has a team of professionals that hold the position of Money Laundering Reporting Officer (MLRO) for a large number of funds serviced by the leading administrators in the Irish market place. Where acting as MLRO, Carne performs a number of key tasks on behalf of the Fund including the following:

  • Preparing MLRO reports for each board meeting outlining details of any suspicious transactions, stopped accounts, regulatory changes etc.
  • Working with the Fund to ensure its AML framework and procedures are aligned with legislative requirements and Central Bank expectations.
  • Assistance with drafting an AML Policy for the Fund and coordinating its annual review.
  • Completing an annual on-site visit to the Administrator to review their AML policies & procedures and review a sample of investor files. A report is produced for the Board highlighting any issues identified.
  • Keeping the Board informed of legislative/regulatory updates relating to AML/CFT.
  • Delivery of annual AML training to the Fund Board.
  • Providing the liaison between the Company and the Irish Police and the Irish Revenue Commissioners, including and concerning the submission of any suspicious activity report where required.

Below is a link to the full report.

For further information on the above or the Carne MLRO and AML Compliance Services, please contact Dave Burns:, TEL: +353 1 489 6829.