Regulated funds registered in the Cayman Islands are now required to appoint a compliance officer as well as a money laundering reporting officer under recent changes to the Guidance Notes on the Prevention and Detection of Money Laundering and Terrorist Financing in the Cayman Islands issued by Cayman Islands Monetary Authority (CIMA).

The officer can be the same person but does need to be at the management level, have sufficient skills and experience and report directly to the governing body of the fund, explained Tania Dons from the offshore law firm Conyers Dill and Pearman.

In addition the officer needs to have "sufficient seniority and authority" so the operator of the fund reacts to and acts on any recommendations made. The officer also need to have regular contact with the fund to ensure statutory obligations are being met and that sufficiently robust measures are being taken to protect the fund against the risk of money laundering and terrorist financing.

According to Dons the officer must be given "sufficient resources, including sufficient time and (where appropriate) a deputy compliance officer and support staff" to carry out the duties as well as "unfettered access to all business lines, support departments and information necessary to appropriately perform the function".

The guidance notes said the compliance officer will ensure regular audits of the fund's anti-money laundering (AML) and countering the financing of terrorism (CFT) programme and advise the fund of AML/CFT compliance issues.

According to Dons the notes say the officer needs to report periodically on the fund's systems and controls and respond promptly to requests for information by the relevant authorities.

Regulated funds may want an administrative/legal audit of their present AML/CFT programme to ensure they have appropriate systems and expertise in place to support the compliance officer role, noted Dons. "Each fund should appoint a compliance officer by resolution or other appropriate executive action) and ensure that their role is clearly defined therein and in the AML/CFT procedures of the fund," she said.