Specialised Solutions for Custodians’ Compliance Management

We offer a comprehensive set of risk and compliance solutions tailored to a variety of custodians' compliance obligations. We can help you comply with custodians' regulations in a commercially oriented and goal-focused manner, providing a tailored approach to custodians' compliance management with regard to your specific circumstances, including:

• Your commercial objectives
• Your custody and safekeeping solutions
• Your business size
• Your technology and human resources
• Your risk appetite
• Your governance structure
• Your client demographics
• Your countries of operation, their applicable laws, and relevant custodial licensing requirements and regulations, including key aspects such as outsourced providers' monitoring, compliance training, risk management, audit, and assurance.
• Any related compliance obligations, including, but not limited to, custodians' obligations under privacy laws, anti-money laundering and counter-terrorist financing (AML/CFT) laws, fair trading laws, and more.
• Custodians' compliance assurance obligations, including internal control design and testing, implementation of compliance calendars, management plans, compliance assurance programs and other second and third-line compliance requirements.
• Specific operational compliance requirements for custodians, including but not limited to:
  • Client due diligence and onboarding
  • Surveillance and monitoring
  • Recordkeeping
  • Conflict of interest management
  • Regulatory technology (RegTech) integration
  • Internal reporting
  • External reporting
  • Transaction execution
  • Regulatory Filings

 

 

What Jurisdictions Do Our Compliance Solutions for Custodians Cover?

Our compliance solutions extend across major financial markets and cover custodians' regulation and custodial licensing requirements in the following jurisdictions:

Our custodian compliance solutions extend across major financial markets, covering custodian regulatory management in the following jurisdictions:

• Australia: Where custodians must comply with the Australian Securities and Investments Commission's (ASIC) regulations, mandating an
• Australian Financial Services Licence (AFSL), for Dealing and Providing Custodial or Depository Services under the Corporations Act 2001.
• United States: Where custody of client assets is performed by qualified custodians such as banks, trust companies, and SEC-registered broker-dealers. Broker-dealers must comply with the Securities Exchange Act of 1934 and the SEC’s Customer Protection Rule (Rule 15c3-3). Investment advisers with custody are required under the SEC’s Custody Rule (Rule 206(4)-2) to maintain client assets with a qualified custodian.
• United Kingdom: Where the Financial Conduct Authority (FCA) oversees financial custody service providers, requiring specific permissions for various custodial activities, including trust and fund custodianship, under the Financial Services and Markets Act 2000 (FSMA).
• Singapore: Where the Monetary Authority of Singapore (MAS) requires custodians to obtain a Capital Markets Services Licence under the Securities and Futures Act, or, if involving crypto custody, a Payment Services Licence under the Payment Services Act. If this a trust-based custodial service, then a Trust Business Licence is another licensing avenue.
• New Zealand: Where custodians must register with the Financial Service Providers Register (FSPR) and comply with the Financial Markets Conduct Act 2013 (FMCA).
• European Union: Where custodians operate under the oversight of national regulators within EU member states, with regulations such as the Markets in Financial Instruments Directive II (MiFID II) and the Alternative Investment Fund Managers Directive (AIFMD).
• Offshore financial centres, including: 

• Cayman Islands: Where custodians are regulated by the Cayman Islands Monetary Authority (CIMA) under the Securities Investment Business Act (SIBA) and related legislation.
• Bermuda: Where custodians are regulated by the Bermuda Monetary Authority (BMA) under the Investment Business Act (IBA).
• British Virgin Islands (BVI): Where custodians are licensed by the BVI Financial Services Commission (FSC) under the Securities and Investment Business Act (SIBA).

 

 

What Types of Custodians Do We Support?

Our custodian compliance solutions cover the following types of financial institutions:

• Fund Custodians
• Securities Custodians
• Bank Custodians
• Digital Asset Custodians
• Trust Custodians

 

Custodians’ Compliance Advisory

Our focus areas include:

• Detailed Compliance Advice: Covering custodians' compliance management issues across the first, second, and third lines, as well as matters related to effective compliance with financial markets regulations and custodial licensing requirements.
• Banking Relationships Advice: On risk and compliance issues related to managing and expanding relationships with banks, liquidity providers, and other financial institutions to help you meet their risk appetite requirements, anti-money laundering and counter-terrorist financing requirements, fraud prevention and recall volume expectations, and other compliance-related and operational standards.
• Operational AML Advice: Advising support, onboarding, KYC, operating and other teams on the day-to-day onboarding and support queue management, effective AML/CFT resource allocations, and operational improvements, helping you maintain the overall customer experience and efficiency while remaining compliant with the AML/CFT requirements for custodians.
• Operational Compliance Advice: Advising compliance, management, technology, and support teams on the day-to-day compliance with financial adviser regulations, focusing on internal processes and critical internal controls for effective custodians' compliance management.
• Risk Management Advice: Covering risk rating and methodologies, risk assessments, management, and mitigation for various risk types faced by custodians, including regulatory, ML/TF, fraud, data protection, and operational risks. We help you safeguard against potential compliance breaches and comply with risk management obligations under custodial licensing requirements and other applicable laws and regulations.
• Compliance Framework Advice: To help you create or enhance your compliance management framework, identify gaps and areas of improvement, meet the custodians' compliance obligations effectively, improve internal governance and reporting, and optimise them for market expansion and growth.
• Custodians' Licensing Advice: We can guide you through the licensing process, help you apply regulations to your specific circumstances and business environment, and meet custodial licensing requirements to become licensed or maintain it.
• Peer Benchmarking and Best Practices: We can help you benchmark your compliance practices against peers and applicable regulatory compliance guidance, identify areas for improvement and adopt best practices for enhanced compliance.
• Government Agencies Liaison Advice: We provide strategic guidance to senior management and compliance teams on maintaining and managing relationships with external bodies, including regulators, AML/CTF supervisors and law enforcement agencies, focusing on long-term compliance strategies and proactive engagement.
• Specific Custodians' Compliance Issues: We can help you resolve specific risk or compliance issues related to custodians' regulations and compliance obligations, including but not limited to external audits and reviews, reporting, oversight, difficult clients or transactions, expansion challenges, compliance management issues, process optimisation, regulatory challenges you may encounter and more.
• Further information: You can visit our Regulatory Compliance Consulting Solutions page for a comprehensive list of advisory services we offer to custodians and other licensed financial institutions, financial services providers, and regulated businesses.

 

 

Reporting and Regulatory Liaison Solutions for Custodians’ Compliance

• Regulator Liaison Management: Providing operational guidance to senior management and compliance teams on managing relationships with regulators, AML/CFT supervisors, police bodies, privacy commissioners, and other government entities. This includes handling requests for information, responding to ad-hoc regulatory inquiries, managing findings from audits and investigations, managing compliance with reporting obligations for custodians and more.
• Board and Committee Reporting: Facilitating structured reporting workflows for various committees and board delegates, including risk, compliance, and audit committees, focusing on your current compliance status, deviations from your risk appetite, changes in risk ratings and any operational compliance updates to ensure that governance structures are well-informed and aligned with compliance management practices.
• Compliance Performance Metrics: Developing and presenting comprehensive compliance performance metrics to the board or relevant committees, offering insights into your compliance effectiveness and identifying points for improvement in key compliance areas, including compliance training, fraud prevention, compliance monitoring, risk rating and assessment, controls effectiveness, adherence to your compliance calendar, regulatory technology (RegTech) performance, and more.
• Internal Audit Reporting: We can help you increase the effectiveness of the internal audit to make its findings reflect your actual performance against the custodians' compliance obligations. This includes developing tailored methodologies for the auditors, preparing the necessary audit evidence and reviewing audit results. The goal is to ensure that audit procedures and outcomes directly contribute to maintaining and enhancing your compliance status and internal controls' effectiveness.
• AML/CFT Reporting Compliance:  We help with the implementation of effective AML/CFT reporting processes, aligning with specific anti-money laundering regulations for internal oversight and prompt escalation of critical AML issues within your business to help the management receive a clear overview of your AML/CFT compliance status.
• Transactional Reporting: Implementing effective transactional reporting procedures to help with custodians' compliance management of reporting obligations under various laws and regulations, including submitting SAR, SMR, STR, PTR, TTR, specific reportable matters under the custodial licensing requirements and other externally reportable transactions and activities.
• Internal Quality Assurance Reporting: While second-line control testing is crucial for complying with custodians' regulations, including custodial licensing requirements, first-line quality assurance results are equally important for effective risk and compliance management. We help organise effective reporting lines, tailor reporting content to your specific circumstances, products, and team size, and establish a structured approach to responding to reporting outcomes.

 

 

Comprehensive Compliance Management Solution for Custodians

Our compliance management services include, but are not limited to, the following:

• Custodians' Compliance Management Leadership: We act as your Compliance Leads and Compliance Managers, fully managing compliance obligations under the applicable custodial licensing requirements, laws, regulations, industry codes, and regulatory guidance.
• Second-Line Compliance Management: We offer a full range of second-line compliance assurance solutions, including internal controls testing for operational, compliance, marketing, legal and other risks, as well as managing issue closure control testing and more.
• Supporting the Board in Strategic Compliance Management: Advising on the necessary compliance resourcing, budget, tools, role structuring, and compliance functions' structure to support your specific business objectives within your risk appetite and risk management framework.
• Compliance Project Management: Effectively coordinating between senior management, committees, legal advisers, risk and compliance functions, outsourced providers, and different departments, including product development, technology, customer support, operations, assurance, marketing, and others, to help you successfully implement compliance projects across the business.
• Customised Governance Solutions: Tailoring governance frameworks and mechanisms to fit your specific governance structure and effectively comply with custodians' regulations and other applicable obligations. Whether your business is locally oriented, a start-up, undergoing expansion, part of a multinational group, has a listed parent company or is undergoing restructuring, we tailor the oversight of custodians' compliance management to your business case.
• Stakeholder Management and Reporting: Reporting to the board, committees, shareholders, regulators and other stakeholders. Providing management and the board with comprehensive compliance reports that cover your compliance with custodians' compliance obligations, regulatory development summary, compliance-related data and statistics, internal controls testing outcomes and more. Also covering the status of your specific compliance-related projects and compliance goals, relevant compliance KPIs, and more.
• Compliance Calendar Implementation: We design and implement compliance management programs and calendars, covering such areas of custodians' compliance obligations as policy and key document reviews, control testing, risk assessment and reviews, vendor reviewers, user system access reviews, assurance activities and more.
• Managing Customer Onboarding and Due Diligence: Implementing commercially oriented and compliant processes for KYC information collecting, Know Your Business (KYB), ML/TF risk assessment, Pep and Sanctions screening, CDD and EDD, especially for higher ML/TF risk clients, to help you comply with AML/CFT compliance obligations for custodians.
• AML Transaction Monitoring and Reporting: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions to comply with the custodians' AML requirements without making AML/CFT compliance a hindrance to business.
• Information Requests and AML/KYC Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF designated entities, such as your banking partners and other essential service providers (liquidity providers, finance providers, etc.), ensuring that you are fully supported in all AML/CTF compliance-related communications.
• Business Expansion Support: Providing support for your business expansion objectives, recognising and assessing new risks, developing and implementing controls and mitigations for them, as well as addressing new compliance obligations and putting in place practical tools and systems to manage them.
• Custodians' Operational Compliance: Including but not limited to:
  • On-the-Ground Compliance: Conducting compliance management meetings, organising routine and ad hoc compliance reporting, overseeing mitigations and controls testing, leading adjustments and enhancements to your internal controls and protocols when required.
  • Compliance Process and Operations Building: Developing effective and compliant procedures and processes to implement your policies, support your operations across different teams and mitigate operational, regulatory and other risks.
  • Outsourced Provider Performance Monitoring: Setting up initial due diligence and ongoing review frameworks for your outsourced providers to help you meet the required service standards for outsourcing under various custodians' compliance obligations, including custodial licensing requirements.
  • Incident Management and Reporting: We can help you set up effective processes for incident reporting, escalations, and management at different levels of your business.

 

 

Custodians’ Compliance Assurance 

Our services include:

• Compliance Assurance Programs:  We can design and implement your compliance assurance program to maintain enhanced oversight of your compliance with both financial adviser regulations and your internal compliance and risk appetite thresholds.
• Organisation-Wide Risk Assessments: Helping you focus on the specific risks faced by your business, considering its size, products, client types, jurisdictions of operation, delivery channels, financial institutions you interact with, available technology, and other tools. This includes assessing available mitigations, controls, their effectiveness, residual risk ratings, and the plan to move forward.
• Internal Controls Design: We can develop internal controls for various risk types, including regulatory, fraud, operational, strategic, financial, and other risks. Please visit our Internal Controls Design page for more information. 
• Assurance Testing: We conduct assurance testing to verify that the business complies with its policies, procedures, and custodians' compliance obligations, including custodial licensing requirements. We also assess whether your internal controls effectively mitigate existing risks, including those required to be monitored under the applicable custodians' regulations. This process includes a compliance controls testing report and, if necessary, a gap analysis.
• Compliance Quality Assurance: We go beyond merely meeting regulatory requirements. We focus on evaluating and enhancing your risk and compliance management processes to ensure they align with your current and future goals, business model, your risk analysis, your current client inflow, and more. We also suggest which compliance processes you can use to meet your goals. Here is an example of this service in the AML/CFT area.
• Assurance Reporting: Compiling testing findings and issuing comprehensive compliance assurance reports, which include:

• Identification of any deficiencies or control weaknesses, with clear explanations and potential root cause analysis.
• Recommendations for corrective actions to address identified issues and enhance compliance effectiveness.
• Evaluation of the overall effectiveness of your internal controls and regulatory compliance monitoring program against your desired assurance level.

• Regulatory Inspection Readiness: We can help your business prepare for external audits and regulatory inspections, reducing the risk of adverse findings related to custodians' compliance obligations. This includes conducting mock inspections to identify gaps, reviewing documentation and record-keeping practices to ensure all relevant materials are well-organised and readily accessible, and training staff on their roles in the inspection process. We assist in identifying any missing information and weak points, provide interview preparation, and more to ensure readiness for auditor or regulator review.
• Further information: You can visit our Compliance Assurance Solutions page for more information on our third-line compliance assurance review solutions.

 

 

Compliance Remediation Solutions

Our focus areas include:

• Compliance Remediation Advice: Assisting custodians in effectively addressing and rectifying compliance issues, from minor breaches to significant regulatory challenges, including warnings and action plans.
• Remediation Plan Development: Following the independent review, we assist in analysing the findings to identify necessary remedial actions. We then support custodians in devising a detailed plan outlining these actions for submission to your regulator or an AML/CFT supervisor, ensuring the plan is both actionable and compliant with regulatory expectations.
• Remediation Plan Commitment: We help custodians complete their remediation plans and prevent non-compliance recurrence.
• Executive Attestation Support: Our services include assisting senior executives in preparing the required attestations to your regulator. This involves confirming that all necessary remedial actions have been undertaken and adequate compliance measures are in place, supported by comprehensive documentation and evidence. This option covers assistance with the removal of any licensing restrictions.
• Further Information: For more information, you can visit our Compliance Remediation Solutions page.

 

 

Internal Controls Testing and Custodians’ Compliance Management

When it comes to reality versus a nice policy or procedure with nothing else to show for it, it’s often a case where a policy says A, but reality says B. One might ask, why didn’t we test our internal controls before? Or, why didn’t we do it properly? There’s nothing worse than faking compliance instead of actually doing it.

Our second line of compliance defence solutions covers the development, testing, and enhancement of a wide range of controls to ensure compliance with various laws and regulations governing custodians' compliance obligations.

We go beyond merely quoting custodian service providers' regulations or a selection of licensing requirements, then adding Excel sheets painted in different colours as a supposed source of truth with nothing to show for it.

• We test them.
• We link them to your risk appetite and core risk management documentation.
• We provide relevant suggestions and analysis tailored to your business.

Some of our focus areas for testing the custodians' compliance requirements include:

 

Regulatory Compliance and Licensing Controls

• Compliance Management: Custodians are expected to have robust systems to ensure compliance management.
• Liquidity Management: Custodian service providers are expected to maintain adequate liquidity to meet financial obligations promptly and should adhere to comprehensive risk management standards covering various risk types, ensuring robust risk frameworks are in place. This control can be relevant for custodians, especially those managing large amounts of client assets. Maintaining adequate liquidity is important to meet short-term obligations, particularly in times of financial stress or market disruptions. Custodians need to ensure they have sufficient liquidity to handle client demands, operational needs, and unforeseen contingencies.
• Financial Auditing: Custodian service providers should engage qualified auditors to conduct regular financial audits in order to verify the accuracy of financial statements and ensure regulatory compliance.
• Counterparty Risk Management: Custodian institutions should implement robust counterparty risk management practices to safeguard client assets, ensuring that any counterparties involved in custodial activities, such as sub-custodians, are reputable and meet regulatory standards. This includes conducting thorough due diligence, regular assessments, and monitoring of counterparties to ensure they maintain the required level of compliance and financial stability.
• Cross-Border Application of Regulations: Custodians should comply with specific guidelines and rules regulating the cross-border application of national custodial licensing requirements when offering services to retail clients in other jurisdictions.
• Digital Payment Token Services: Custodian institutions are expected to comply with regulations set out by regulators for dealing with digital payment tokens, which may not be fully covered under traditional regulations, as a definition of what is a financial product may not cover all tokens. However, given the markets’ self-regulation and development, there are now certain expectations about crypto custody.
•  (AML/CFT) Controls: Custodian institutions should implement Anti-Money Laundering/Countering Financing of Terrorism (AML/CFT) controls to prevent money laundering and terrorist financing.
• Data Privacy: Custodians should ensure compliance with data privacy regulations like GDPR and CCPA.
• Sanctions Compliance: Custodian institutions should adhere to economic and trade sanctions.

 

 

Operational Oversight Controls

• Outsourcing Oversight: Custodian service providers are expected to maintain control and oversight over outsourced functions to ensure they do not compromise regulatory obligations or client protection. Custodians should manage their relationships with outsourced service providers to ensure adherence to all custody rules.
• Risk Management: Custodian institutions are expected to establish comprehensive risk frameworks and procedures to identify, assess, and manage operational and market risks. This includes implementing robust measures to protect client accounts and assets.
• Governance Arrangements: Custodian institutions should have effective governance structures in place to oversee operations and ensure responsible management and decision-making.
• Senior Management Accountability: Custodian institutions are expected to assign specific responsibilities to senior managers to ensure accountability for conduct and competence.
• Operational Resilience: Custodian institutions should ensure the resilience of critical business services, planning for continuity amidst disruptions.
• Technology Risk Management: Custodian service providers are expected to implement strong technology controls to safeguard digital assets, especially in environments with a strong emphasis on cybersecurity and system reliability requirements.
• Safekeeping and Segregation of Assets: Custodians should enhance controls around the physical and electronic safekeeping of assets, ensuring that client assets are adequately segregated from the custodian's own assets and protected against unauthorised access or use.
• Incident Response: Custodian Service Providers should establish a plan for responding to security incidents and data breaches.

 

Market Integrity and Transparency Controls

• Market Conduct Standards: Custodian Institutions are expected to ensure market conduct is fair, transparent, and free from abuse, including manipulation or insider trading.
• Fair Dealing Principles: Custodian institutions should adhere to principles that ensure fair treatment of clients, with clear communication and transparent dealings.
• Conduct and Disclosure Standards: Custodian service providers should maintain high standards of conduct and ensure that disclosures to clients are clear, accurate, and effective, which is crucial for maintaining compliance with custodian service providers' regulations.
• Service Provision Standards: Custodian institutions should provide custody services efficiently, honestly, and fairly.
• Product Governance: Custodian institutions should have adequate arrangements for product design, approval, and review to ensure they meet regulatory requirements and client needs. This includes ensuring that client accounts are managed according to the highest standards.
• Client Asset Protection: Custodian service providers are expected to protect client assets and segregate them from company funds, with clear rules on their use and handling. This is essential for maintaining trust and compliance with custodian service providers' regulations.
• Dispute Resolution: Custodian institutions should have proper mechanisms for dispute resolution and client compensation, especially for retail clients.
• Conflict of Interest Management: Custodian institutions should develop and implement controls to identify, disclose, and manage conflicts of interest that may arise from custodial services, particularly when the custodian is part of a larger financial institution that may have multiple roles with respect to the same assets.

 

Resource Management Controls

• Resource Adequacy: Custodian service providers are expected to maintain adequate financial, technological, and human resources for effective operations.
• Professional Competence: Custodian institutions should ensure key personnel possess the necessary competence, knowledge, and skills to comply with custodian service providers' regulations.
• Cybersecurity Controls: Custodian service providers should implement robust cybersecurity measures to protect client assets from cyberattacks.
• Advisor and Representative Competence: Advisers and representatives providing advisory services on financial products are expected to receive adequate training and demonstrate competence. Although not directly related to the custodial licensing requirements, this is relevant for some business models where custody services are provided alongside financial advice.
• Specialist Expertise in Regulatory Compliance: Custodian institutions should have access to legal and regulatory expertise to navigate complex and evolving regulatory landscapes effectively.

 

Reporting Controls

• Comprehensive Transaction Reporting: Custodian service providers are expected to provide detailed reporting of custodial activities and transactions as required by regulators and AML/CTF supervisors. They should ensure that all client accounts are accurately reported and maintained.
• Regulatory Reporting: Custodian institutions are expected to submit regular reports to the relevant authority, detailing financial status, custody services, and compliance status. This includes adherence to the custodial licensing requirements.
• Record-Keeping: Custodian institutions should maintain accurate records of all business transactions and financial matters for transparency and accountability under various laws applicable to custodians, including AML/CFT, tax, financial marketing laws, and custodial licensing requirements.
• FATCA and CRS Reporting: Custodian service providers are expected to implement procedures to ensure compliance with international tax reporting obligations under FATCA and CRS, including identifying reportable accounts, conducting due diligence on account holders' tax residency, and accurately reporting to relevant authorities.

 

Transactional Controls

• Authorisation and Verification Procedures: Custodian service providers are expected to verify transaction authorisations and ensure alignment with custody agreements. This includes maintaining rigorous controls for all client accounts and ensuring compliance with custodian service providers' regulations.
• Conflict of Interest in Transactions: Custodian institutions should manage conflicts of interest, particularly in selecting sub-custodians or engaging in related-party transactions.
• Periodic Review and Reconciliation: Custodian institutions are expected to conduct regular review and reconciliation of client assets to ensure accuracy and compliance with custody agreements. This is essential for maintaining trust and transparency in custody services.
• Settlement and Reconciliation Procedures: Custodian service providers should establish robust controls to ensure the timely and accurate settlement of transactions, along with regular reconciliation of client asset records to prevent and detect errors, discrepancies, or unauthorised activities. This is critical for compliance with custodial licensing requirements.

 

Financial Licensing Solutions for Custodians

• Financial Licensing Application Support: We provide comprehensive support for a wide range of custodians' licensing and registration applications they are required to obtain, tailored to different types of custodial services, custodian service providers' regulations:

• AFSL Application Support for Australian Custodians: We guide fund custodians, securities custodians, and bank custodians through ASIC's AFSL application process, ensuring comprehensive compliance for a range of custodial services under the Corporations Act 2001. Visit our AFSL Solutions page for Custodians for more information.
• FSPR Registration for Custodians in New Zealand: We assist fund custodians, securities custodians, and trust custodians in obtaining registration on the Financial Service Providers Register (FSPR) and enrolling as AML/CFT reporting entities. Visit our New Zealand Custodians' FSP Registration page for more information.
• FCA Custodian Permissions in the UK: We help fund custodians, securities custodians, and bank custodians secure the necessary permissions from the Financial Conduct Authority (FCA), navigating the UK's regulatory requirements to ensure full compliance with the Financial Services and Markets Act 2000. Visit our dedicated page on Custody Services Permission under the FCA Authorisation for more information.
• Compliance with SEC’s Custody Rule in the United States: For securities custodians and bank custodians operating as investment advisers, we facilitate compliance with the SEC’s Custody Rule under the Investment Advisers Act of 1940, ensuring adherence to federal securities laws and safeguarding client assets.
• Licence Pathways for Custodians in Singapore:
• CMSL: We assist fund custodians, securities custodians, and trust custodians in obtaining the MAS Capital Markets Services Licence, ensuring compliance with the Securities and Futures Act and other applicable regulations for a broad spectrum of custodial services. Visit our CMS Licence page for more information.
• SPI/MPI: We also assist business involved in custodial services over crypto and digital assets with Standard Payment Institution or Major Payment Institution licenses. Visit our MPI Licence page or SPI Licence page for more information.
• We also help businesses in get a Trust Business Licence under the Trust Companies Act.
• Cayman Islands Monetary Authority (CIMA) Custodians' Licence: We guide fund custodians and securities custodians in obtaining a custodians' licence under the Securities Investment Business Act (SIBA), ensuring compliance with the Cayman Islands Monetary Authority’s (CIMA) regulatory requirements.
• Bermuda Monetary Authority (BMA) Custodians' Licensing: We assist fund custodians and trust custodians with the registration process under the Investment Business Act (IBA), ensuring they meet the Bermuda Monetary Authority’s (BMA) standards for investment business activities.
• British Virgin Islands Financial Services Commission (BVI FSC) Custodians' Licence: We support fund custodians and securities custodians in obtaining a custodians' licence under the Securities and Investment Business Act (SIBA), ensuring compliance with the British Virgin Islands Financial Services Commission (BVI FSC) regulations.
• International Governance Alignment: We provide strategic advice on aligning governance models and custodian governance practices for institutions operating across multiple jurisdictions to meet diverse regulatory expectations while maintaining operational efficiency and regulatory compliance.

 

Policies and Procedures for Custodians’ Compliance Management

• Compliance Policies and Core Documents: We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective custodian service providers' compliance management.
• Effective Procedures for Custodians' Compliance Management: We draft and enhance a detailed set of procedures and protocols to meet the distinct needs of your business, focusing on efficient compliance, your business goals, and applicable custodians' compliance requirements.
• Examples: These policies and procedures include, but are not limited to:

 

Operational Compliance

• Compliance Management Frameworks
• Compliance Monitoring Programs
• Compliance Calendars and Checklists
• Complaints Handling and Dispute Resolution Policies
• Compliance Training Manuals and Programs, as part of our regulatory compliance training solutions
• Obligation Registers
• Incident Reporting Policies and Procedures
• Custody Agreement Policies
• Outsourcing Policies and Vendor Risk Management policies as part of our outsourced provider's compliance management solutions
• New Client Account Opening Policies and Procedures, as part of our customer onboarding solutions

 

Governance and Oversight

• Board Charters, Risk, Audit and Compliance Committee Charters, as part of our corporate governance solutions
• Codes of Conduct
• Delegations Registers
• HR Manuals and Policies
• ESG Compliance Policies
• Conflict of Interest Policies
• Sub-Custodian Selection and Monitoring Policies

 

Risk Management

• Risk Management Frameworks as part of our risk management solutions
• Risk Assessment Guidelines and Methodologies
• Internal Control Testing Methodologies
• Risk Registers and specialised risk registers like Health and Safety Risk Registers
• Cybersecurity Risk Management Policies
• Asset Segregation Policies
• Client Asset Reconciliation Procedures
• Digital Asset Custody Policies

 

Audit and Assurance

• Compliance Assurance Programs as part of our compliance assurance solutions
• Internal Audit Policies and Programs as part of our internal control testing solutions
• Regulatory Reporting Procedures

 

Client and Market Conduct

• Market Infrastructure Interaction Policies
• Marketing and Advertising Policy
• Corporate Actions Management Policies

 

AML/CFT and Financial Crime Compliance

• AML/CFT Compliance Programs
• AML/CFT Risk Assessment
• Whistleblowing Policies
• Sanctions Compliance policies and procedures
• Fraud Prevention Protocols and Controls as part of our fraud prevention solutions
• ABC Policies

 

Privacy and Data Management

• Client Data Protection Policies
• Record-keeping Policies and Procedures and/or Data Governance Policies as part of our record-keeping compliance solution
• External Privacy Policies
• Internal Data Protection Compliance Program

 

 

Compliance Training and Capacity Building

We focus on practical compliance and training application to real-world compliance scenarios and challenges that custodians generally face. Our services include:

• Customised Compliance Training Solutions:  Specialised compliance training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on custodians' regulations, applying custodians' compliance management practices to your circumstances, risk awareness, and more.
• Up-to-date Regulatory Compliance Updates:  Keeping compliance officers, managers, CROs, COOs, and other Risk and Compliance team members informed of changes in custodial licensing requirements and regulations, AML/CFT updates, and changes in regulatory guidance.
• Data Analysis for Effective Compliance Monitoring: Covering training on compliance-related, data-based analysis and its results, including risk rating, internal control adjustments, resource and focus reallocation, and more.
• Workshops on Emerging AML Trends and Red Flags: Updating on the new AML trends, red flags, typologies, and AML/CFT requirements for custodians. For more information, please visit our AML/CFT Training Solutions page.
• Practical Workshops: Interactive workshops focused on effective and goal-oriented custodians' compliance, capacity planning, and resource allocation, covering:

• Custodians' regulations
• Internal and external compliance reporting
• Effective governance over risk and compliance functions
• Organisation-wide risk assessment, risk rating methodologies and the development, management, and testing of corresponding internal controls, including controls testing methodologies and practical techniques.
• Custodians' compliance reality, including outsourced provider monitoring, UAV management, incident management, product suitability assessments, advertising and marketing compliance, improvements in the client onboarding journey, transaction monitoring processes, and more.

• Further information: You can visit our Compliance Training Solutions page for more information on the compliance training services we offer to licensed financial institutions and financial service providers.

 

Custodians and AML/CTF Compliance

We offer a complete set of solutions covering custodians' anti-money laundering (AML), financial crime and counter-terrorism financing (CTF) compliance. Our solutions include:

• Customer due diligence, screening, and customer onboarding solutions
• Development of transaction monitoring frameworks tailored to custodians' specific ML/TF red flags and your business specifications
• AML advisory covering financial advice providers' compliance issues and challenges
• Drafting, testing, and updating AML policies and procedures
• AML training and capacity building
• Managed AML compliance solutions for custodians and trustees
• Internal and statutory AML audit solutions for custodians
• Financial crime prevention framework development focusing on common fraud risks faced by custodians.
• For more information, please visit our specialised AML Compliance Solutions page for Custodians

 

Custodians’ Compliance Technology Integration

Our services cover compliance aspects concerning the integration of technology for risk and compliance e-management, transactional reporting (where applicable), usage of AI, technology outsourcing, and compliance aspects of third-party risk management for financial advisers, including:

• Needs Assessment
• Compliance Technology Selection: Based on your budget, products, available operational and technical resources, and the applicable custodians' compliance obligations
• Implementation assistance across the organisation
• Streamlining operational workflows: For routine compliance tasks like data collection, reporting, and risk assessments
• AML/CFT Compliance Technology: Covering customer digital onboarding, E-KYC, PEP and sanctions screening, transaction monitoring, etc.
• Integration of custodians' compliance obligations into an effective CRM system
• Record-Keeping Obligations: Helping you choose and integrate the necessary tools to comply with the record-keeping requirements under various laws and custodians' regulations

 

Data Management and Information Privacy Solutions

• Data Governance and Compliance:  Assisting custodians in establishing robust data governance procedures, programs, and protocols that align data collection, storage, and usage practices with relevant data privacy regulations, such as GDPR, CCPA, and other applicable laws. These measures safeguard sensitive client and business information from unauthorised access, breaches, and misuse.
• Privacy Policy Compliance Monitoring: Helping you implement privacy policies that reflect the latest data protection legislation, supported by continuous compliance monitoring tools to maintain the highest data privacy standards.
• Record Maintenance Protocols:  We assist in developing and implementing effective procedures for maintaining necessary records, covering custodians' compliance with applicable regulatory reporting standards and reporting requirements.
• Record Availability and Inspection Readiness:  Custodians' regulations often require records to be readily available for inspection by regulators, AML/CFT supervisors, tax agencies, and other relevant authorities. This extends to information kept by your outsourced service providers. We help you organise your record-keeping processes to meet these needs.

 

ISO Standards and Custodians’ Compliance

• Cross-Reference Mapping: Integrating ISO standards such as ISO 27001, ISO 9001, and ISO 22301 into an existing compliance framework and linking specific sections of ISO standards to corresponding procedures in your internal policies and procedures.
• Pre-Audit Preparation: Coordinating ISO controls testing across different parts of the business.
• Leading evidence collection across the different departments to cover relevant compliance areas such as planning, governance, organisational controls, operational controls, technological controls, and physical controls through structured workflows.
• Digital Compliance Repository: Helping you utilise a centralised digital repository for storing all compliance-related documents and evidence, making it easily accessible for audit purposes and compliance verification.
• ISO Audit Liaison:  Acting as a liaison between your team and the auditors, coordinating information requests, and ensuring all the necessary documentation is readily available.
• Post-Audit Remediation Management: We can lead the implementation of your remediation plan and support corrective actions to address all audit findings effectively.

 

Regulatory Change Management Solutions

Empower Your Business with Proactive Regulatory Change Management:

• Stay Ahead of the Curve:  We actively monitor regulatory updates from global financial authorities like MAS, ASIC, FMA, FCA, SEC, and other regulators for custodians' compliance changes and updates to evaluate the implications of regulatory changes.
• Impact Assessment and Mitigation Strategies: We analyse the potential impact of regulatory changes on custodians' compliance management frameworks and operational processes. We then collaborate with you to develop effective mitigation strategies that support continued compliance and minimise disruption.
• Seamless Implementation and Change Management:  We guide custodians through necessary process adjustments, update internal policies and procedures, facilitate a smooth transition through regulatory changes, and assist with effective communication with impacted stakeholders.