Investment Advisors, Dealers, Brokers and Mutual Trust Schemes

The Financial Transactions Reporting Act applies to persons and entities engaged:

1. in investing, administering, managing or keeping safe custody of fund or money on behalf of other persons; (e.g. stock brokers and dealers)
2. in issuing securities and the provision of financial services related to such issues; (e.g. issuing of bonds or treasury bills)
3. as a trustee or manager of a unit trust;
4. as a trust provider ( i.e. setting up trusts, providing a registered office for a trust; acting as or arranging for another person to act as a trustee.)
5. in trading in:
   • Money Market Instruments ( eg bills, cheques, derivatives etc.);
     Foreign Exchange;
     Financial Futures and Options;
   • Exchange, Interest Rate and Index Instruments;
   • Commodity Futures Trading; and
   • Transferable Securities.

The FTR Act also applies to mutual trust schemes, as defined in the Capital Markets Development Authority Act 1996; investment companies, money brokers and a broker or dealer of any other financial services

Your key obligations under this Act are as follows:

1. Identify and verify your clients;
2. Monitor your clients transactions;
3. Maintain proper clients records;
4. Report transactions to the Financial Intelligence Unit;
5. Implement appropriate internal controls and systems to protect your business from being used for money laundering and terrorist financing purposes.

Client Identification and Verification

You must undertake specific procedures to identify your clients. You must also ensure that accounts are opened and maintained in the true name of the client.

For further guidelines refer to

• Policy Advisory 1/2007- Customer Due Diligence of Existing Customers’ Accounts
• Policy Advisory 2/2007- Customer Due Diligence of Customers Who Have Insufficient or No Official Identification Documents
• Policy Advisory 3/2007- Identification and Verification of a Customers’ Signature
• Policy Advisory 1/2010 - Identification and Verification of a Customer's Signature
• Policy Advisory 2/2010 - Use of Referee Letter to Verify a Customer's Identity
• Guideline 4 of 20 August 2009 - Customer Identification & Verification

Monitor your Clients transactions

You must scrutinize or monitor your client's transactions to ensure that the transactions being conducted are consistent with your knowledge of the client and his or her background.

For further guidelines refer to: 
Guideline 1 of 26 October 2007 – Suspicious Transactions

 

Maintain Proper Clients Records

You must establish and maintain records of your clients’ identity, transactions and records of all reports of transactions made to the FIU. Any enquiries made to your firm by the FIU and other law enforcement agency must also be recorded.

For further guidelines refer to Policy Advisory 7/2007- Record Keeping

Report transactions to the Financial Intelligence Unit

You must report the following types of transactions to the FIU:

• All Cash transactions of $10,000 or more including equivalent amounts in foreign currency. "Cash" includes currency, bank drafts, bank cheques, bearer bonds, traveller's cheques, postal notes and money orders.
• All Suspicious transactions including transactions or attempted transactions for which satisfactory evidence of identity was not obtained from the client.

Terrorist Property

If you have in your possession or your control any property which is owned or is controlled by a terrorist or terrorist group or if you have information on a transaction or proposed transaction relating to a terrorist property, you must report this information to the FIU.

For further guidelines refer to: 
Guideline 2 of 26 October 2007 - Reporting a Suspicious Transaction by Paper
Guideline 3 of 22 May 2009 - Reporting Cash Transactions of $10,000 or above by Paper

 

Internal Controls and Systems

Other measures that your firm must implement are:

• Develop and implement internal policies and procedures to comply with the FTR Act.
• Appoint a "Compliance Officer" to be responsible for ensuring compliance with the FTR Act and Regulations.
• Regularly review your compliance with your internal anti money laundering and terrorist financing polices and procedures.
• Implement adequate recruitment procedures to screen potential employees.
• Have regular training for staff on anti-money laundering and terrorist financing issues and legislative requirements.