CSC publishes AML and KYC compliance guide for fund managers

New whitepaper details the key components of the AML and KYC regulatory requirements and addresses their importance to the alternative investment space.

By Chris Lemmon

PEF Services, a CSC company, has published a guidance on AML and KYC compliance for private capital fund managers.

The whitepaper, titled AML and KYC Compliance: a guide for private capital fund managers, acknowledges that while private capital funds have long been aware of the requirements around AML and KYC, regulatory compliance has become a challenge for many firms.

PEF highlights the key components of the relevant regulatory requirements and addresses their importance to the alternative investment space, also examining cost-effective ways to manage the process.

The whitepaper covers:

  • Six pillars of an AML and KYC programme and their considerations for alternative investment
  • Outsourcing the complexities of AML and KYC and service provider considerations
  • AML and KYC outsourcing checklist: questions to ask when selecting a service provider

“In the US, regulators will introduce the most substantive changes to AML and KYC guidelines since the USA Patriot Act of 2001,” said Chalene Ellis, CSC’s director of operations and compliance for US fund services. “These changing guidelines, combined with complex structures and new investment strategies, place added pressure on many general partners for transparency and drive an increased need for specific expertise.”

“For alternative investment firms, flexibility and a focus on the core business matter,” added Jolanta Pastula, CSC’s director of investor services for US fund services. “So, it’s not surprising that as fund administration grows in complexity, compliance outsourcing has become mainstream as higher head counts, greater expertise, and sophisticated technological resources are needed to keep pace with regulations.”

CSC acquired private equity administration specialist PEF Services in June last year, highlighting the attraction of private equity fund service providers in the market.

PEF was nominated by Global Custodian as a Fund Administration: One to Watch in 2019 following its spate of new business wins and growth. Some of the firm’s recent wins include the selection to provide fund administration services to $2 billion asset manager Star Mountain Capital, private equity investment firm, RFE Investment Partners, real estate firm, Blue Flag Partners and Puerto Rican private equity firm, Parliament Capital Management.

The whitepaper is available to read here.