NOTE: This AML policy for a small UK Investment Manager was drafted entirely by an LLM. Projecting does not suggest this could be used as is, but rather that it could be used as the starting point for an experienced Financial Crime professional within an Investment Manager to edit and curate into an AML policy, incorporating any specificities of their business practices. It would also be possible to use LLMs to go into greater detail on any of the parts of the document, for example to draft specific policies on CDD, EDD, reporting, etc as outlined in the last section of this document.
AML Policy for a Small UK Investment Manager
This document sets out the anti-money laundering (AML) policy of XYZ Investment Management Ltd (the Firm), a small UK investment manager authorised and regulated by the Financial Conduct Authority (FCA).
The Firm is committed to complying with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), as amended by the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, and other relevant laws and regulations relating to AML and counter-terrorist financing (CTF).
The Firm recognises that money laundering and terrorist financing pose serious risks to the integrity of the financial system and the security of society. The Firm also recognises that as an investment manager, it may be exposed to various types of money laundering and terrorist financing risks, such as:
- being used by criminals to launder the proceeds of crime through investment products or services
- being used by terrorists or their associates to fund or facilitate terrorist activities through investment products or services
- being involved in transactions or relationships with individuals or entities subject to sanctions or embargoes
- being involved in transactions or relationships with individuals or entities from high-risk jurisdictions or sectors
The Firm has adopted a risk-based approach to AML and CTF, which means that it applies appropriate and proportionate measures to identify, assess, mitigate, and monitor the money laundering and terrorist financing risks it faces.
The Firm has appointed a senior manager as the Money Laundering Reporting Officer (MLRO), who is responsible for:
- overseeing the implementation and effectiveness of the AML policy and procedures
- ensuring compliance with the MLRs and other relevant laws and regulations
- providing training and guidance to staff on AML and CTF matters
- establishing and maintaining a record-keeping system for AML and CTF purposes
- reporting any suspicious activity or transactions to the National Crime Agency (NCA)
- liaising with the FCA, the NCA, and other authorities on AML and CTF matters
The MLRO reports directly to the board of directors, who are ultimately responsible for ensuring that the Firm complies with its AML and CTF obligations.
AML Risk Assessment
The Firm conducts an annual AML risk assessment to identify, assess, mitigate, and monitor the money laundering and terrorist financing risks it faces. The AML risk assessment covers:
- the nature, scale, and complexity of the Firm’s business activities
- the types of clients, products, services, transactions, and delivery channels involved in the Firm’s business activities
- the geographic locations where the Firm operates or has clients
- the internal controls and systems that the Firm has in place to prevent and detect money laundering and terrorist financing
The AML risk assessment is documented and reviewed by the MLRO and approved by the board of directors. The AML risk assessment is updated whenever there are significant changes in the Firm’s business activities, risk profile, or regulatory environment.
AML Policies, Controls, and Procedures
The Firm has established and maintains appropriate policies, controls, and procedures to manage and mitigate the money laundering and terrorist financing risks it faces. These include:
- customer due diligence (CDD) measures to verify the identity, beneficial ownership, source of funds, source of wealth, purpose of business relationship, and risk profile of clients
- enhanced due diligence (EDD) measures to apply additional scrutiny to clients or transactions that present a higher risk of money laundering or terrorist financing
- ongoing monitoring measures to review clients’ activities, transactions, risk profile, and CDD information on a regular basis
- record-keeping measures to retain copies of CDD documents, transaction records, and other relevant information for at least five years after the end of the business relationship or transaction
- reporting measures to report any suspicious activity or transaction to the MLRO, who will decide whether to submit a suspicious activity report (SAR) to the NCA
- training measures to provide regular training to staff on AML and CTF matters, including how to recognise and report suspicious activity or transaction
- audit measures to review and test the effectiveness of the AML policy and procedures on an annual basis
The Firm’s policies, controls, and procedures are documented and communicated to all staff. They are also reviewed and updated by the MLRO on an annual basis or whenever there are significant changes in the Firm’s business activities, risk profile, or regulatory environment.