Compliance Services

RISK BASED AML COMPLIANCE PROGRAM

The proposed rules released pursuant to the USA PATRIOT Act mandate that hedge funds adopt a “risk based” anti-money laundering compliance program. Simply put, this requires each fund to examine their investor base and tailor their compliance program to address the risks presented by that investor base. By definition, this will require treating different types of investors differently. Resources should be focused on those investors determined to be high risk whereas low risk investors need not be subjected to the same level of scrutiny. A compliance program which simply carries out the same minimal procedures for all investors regardless of the risk level they present to the fund would not be a “risk based” compliance program. The program offered by Fulcrum incorporates a detailed risk assessment of the various types of hedge fund investors and provides for appropriate treatment for each depending upon their unique risk characteristics.

WHY THIS AML PROGRAM IS UNIQUE

• Created Specifically For Hedge Funds – risk based procedures tailored to the specific types of hedge fund investors
  
  
• AML Procedures Manual – detailed manual contains a comprehensive risk assessment and procedures designed to mitigate each material risk Comprehensive Coverage – USA PATRIOT Act, Bermuda, BVI, Cayman and Ireland
  
  
• Coordinated and Consistent Approach – focus is on the role the investor plays in the investment process as opposed to the type of legal entity thus ensuring the same type of investor is treated the same way
  
  
• Investor Friendly - each investor is reviewed once and then added to a list of approved investors. No further AML documentation is required for subsequent investments in the same fund or other funds administered by Fulcrum
  
  
• Verification of Investor Identity – steps are taken to reasonably verify the identification documentation submitted by investors
  
  
• High Risk Investors – procedures to screen out shell banks, senior foreign political figures, persons on the OFAC List and other international watch lists
  
  
• Customized Reports – a customized report is prepared with respect to each investor detailing the documentation received, the enhanced due diligence procedures performed and an assessment as to whether it is appropriate to admit the investor into the fund