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September 17, 2002 at 08:00 PM
WASHINGTON (HedgeWorld.com)–The Managed Funds Association mailed the Secretariat of the Financial Action Task Force, Paris, its comments on the FATF’s consultation paper aimed especially at choking off terrorist finances.
On May 31, the FATF released a consultation paper on its review of its 40 recommendations on money laundering. In particular, the FATF said that it was interested in customer identification and due diligence by the whole range of financial institutions, suspicious transaction reporting, and regulation and supervision. In section 3.3 of this consultation paper, the FATF said that there is a potentially higher risk of money laundering where there is little or no face-to-face contact with a customer.
The MFA is concerned about that distinction. “Non face-to-face subscriptions to hedge funds are well accepted throughout the hedge fund industry, as well as in the mutual fund industry. A hedge fund, by its nature, is an investment company that relies on investor subscription agreements to gather investor information and to satisfy domestic and foreign regulatory obligations,” wrote MFA president John G. Gaine Aug. 30.
Mr. Gaine’s letter referenced and praised a more detailed critique of the FATF’s work submitted jointly by the Securities Industry Association, the Futures Industry Association, and the Investment Company Institute. The National Futures Association and the Futures and Options Association have each also submitted comment, each likewise referencing that from the SIA, et al.
