The MLRO, DMLRO and AMLCO for Cayman funds are the three prescribed officers at the centre of the anti-money-laundering and counter-terrorist-financing framework that every Cayman fund conducting relevant financial business must operate. This guide explains who they are, what each does, and how the wider framework beneath them fits together.
Key takeaways
- Cayman funds must appoint an MLRO, a DMLRO and an AMLCO, all of whom must be natural persons.
- The officers oversee suspicious activity reporting and the fund's AML compliance framework.
- KYC and CDD, sanctions screening and risk assessment underpin the framework day to day.
- The roles can be outsourced to a qualified provider, but the board keeps oversight.
The three officers
The MLRO (Money Laundering Reporting Officer) receives internal suspicious activity reports, assesses them and, where appropriate, reports to the Cayman Islands Financial Reporting Authority. The DMLRO (Deputy MLRO) performs that function when the MLRO is unavailable, ensuring continuity.
The AMLCO (Anti-Money Laundering Compliance Officer) oversees the fund's overall AML compliance framework, its policies, procedures and their day-to-day operation, and reports to the board. All three must be natural persons, suitably experienced and sufficiently senior, and are notified to CIMA.
What sits beneath the officers
The officers oversee a framework built on customer due diligence: identifying and verifying investors and their beneficial owners and understanding source of funds. Around that sit sanctions and proliferation-financing screening, a documented risk-based approach and risk assessment, ongoing monitoring, and record-keeping.
In most funds the operational work is performed by the administrator, with the officers providing oversight. The wider obligations are set out in our guide to AML obligations for Cayman relevant financial business.
Reporting obligations
Where there is knowledge or suspicion of money laundering, terrorist financing or related conduct, a suspicious activity report must be made, and the prohibition on tipping off must be respected. These are obligations under the Proceeds of Crime Act (As Revised) and related legislation, and the MLRO and DMLRO are central to discharging them.
Outsourcing the roles
The MLRO, DMLRO and AMLCO functions are frequently outsourced to a qualified service provider, which can be efficient and provide independence and expertise. Outsourcing does not transfer responsibility away from the board: the fund must satisfy itself that the provider is competent and that the officers can properly discharge their duties.
The same board-level oversight applies to the fund's other compliance regimes, including FATCA classification and reporting.
Where Bell Rock fits
Bell Rock Group Financial Services Limited is licensed by the Cayman Islands Monetary Authority as a Company Manager under the Companies Management Act (As Revised), Licence No. 633916. Through its Cayman AML and compliance support, Bell Rock provides MLRO, DMLRO and AMLCO appointments to Cayman funds through named individuals, together with the oversight records and documentation that CIMA and investors review. Bell Rock does not provide an internal audit or independent AML audit to any entity for which its individuals act as AML officers.
Related reading
- Beneficial ownership contact person for Cayman funds
- CIMA governance guidance for regulated fund boards
- CIMA's Rule on an Effective Compliance Programme: What Changes for Cayman Entities
- Financial Sanctions Compliance for Cayman Funds and Companies
Bell Rock provides AML officer appointments through its Cayman AML and compliance support service.
Next step
Appointing AML officers for a Cayman fund?
Bell Rock provides MLRO, DMLRO and AMLCO appointments through named individuals, with the supporting oversight records. Tell us about the fund and its administrator.
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