On 25 November 2019, the CSSF (Commission de Surveillance du Secteur Financier, Luxembourg’s financial sector supervisory authority) issued its frequently asked questions (FAQs) regarding persons involved in AML/CFT for a Luxembourg Investment Fund (Fund) or Investment Fund Manager (IFM) supervised by the CSSF for AML/CFT purposes.
The CSSF answered the following two questions:
- How do the requirements of Article 4(1) of the Law of 12 November 2004, as amended (the “Law”), that call for the appointment of two different persons in charge of AML/CFT need to be implemented by a Luxembourg Investment Fund or Investment Fund Manager supervised for AML/CFT purposes by the CSSF?
- What are the conditions applicable to the persons in charge of AML/CFT pursuant to Article 4(1) of the Law?
Article 4(1) of the Law requires professionals to appoint:
- a person among the members of their management bodies, responsible for compliance with the professional obligations as regards the fight against money laundering and terrorist financing (responsable du respect des obligations, or “RR”), and
- if the size and nature of the activity so require, a compliance officer at the appropriate hierarchical level (responsable du contrôle du respect des obligations, or “RC”).
The CSSF reminds readers that every Luxembourg Investment Fund and Investment Fund Manager subject to AML/CFT supervision is legally required to appoint both an RR and an RC. The CSSF further explained what this rule shall mean in practice.
The CSSF also clarifies the conditions applicable to the persons in charge of AML/CFT, in particular the CSSF requests that both the RR and the RC be knowledgeable on the investments and distribution strategies of the Fund/services offered by the IFM and that both be available without delay when contacted by Luxembourg’s competent AML/CFT authorities.
The RC shall have access to all internal documents and systems required for performing its tasks. This condition is particularly relevant where an RC is not physically in Luxembourg on an on-going basis.
According to the circumstances and the size of the Investment Fund, in particular for small Investment Funds, the RR can be the entire board of directors (or the governing body) and the RC may be a member of the board of directors with appropriate experience.