The Cayman Islands has entered a new phase of AML regulation.

On 20 July 2026, the Cayman Islands Monetary Authority (CIMA) gazetted a new Rule on Effective Compliance Programme for the Prevention and Detection of Money Laundering, Terrorist Financing and Proliferation Financing, together with a new Rule on Compliance with Financial Sanctions and Targeted Financial Sanctions. The rules came into force on 18 September 2026 and have transformed many previously non-binding AML guidance requirements into directly enforceable obligations. Breaches may now result in regulatory action and fines.

Among the most significant developments are:

• • Mandatory independent AML audits.
• • Greater emphasis on documented AML compliance programmes.
• • Enhanced requirements for beneficial ownership maintenance.
• • Formalized risk assessment requirements and trigger-event reviews.
• • New training plan requirements.
• • Additional oversight of outsourced AML functions.
• • Enhanced sanctions compliance obligations.
• • Increased focus on evidencing compliance and maintaining audit-ready records.

The new AML Rule requires regulated financial service providers to establish and maintain an effective compliance programme built around five core pillars:

1. 1. Designated AMLCO, MLRO and DMLRO.
2. 2. Documented policies, procedures and controls.
3. 3. A documented risk-based approach and periodic risk assessments.
4. 4. Ongoing compliance training supported by a documented training plan.
5. 5. Ongoing evaluation of programme effectiveness, including independent audit.

While an independent AML auditor and the fund's AMLCO remain responsible for oversight, one practical reality remains unchanged:

The success of an AML audit depends heavily on the quality of the fund's underlying investor records, KYC documentation, screening processes and operational recordkeeping.

This is where an experienced fund administrator can add substantial value.

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A Robust AML Framework Starts with Strong Fund Administration

As a fund administrator, Precision helps establish and maintain the operational infrastructure that supports a strong AML and KYC framework throughout the life of a fund.

Many of the documents and records requested by AML auditors originate from day-to-day fund administration activities, including investor onboarding, KYC collection, beneficial ownership documentation, screening records, subscription processing and investor record maintenance.

By embedding these processes into normal fund operations, managers and directors are better positioned to meet the heightened expectations under the new CIMA AML Rules.

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Investor Onboarding Built Around Compliance

A strong AML framework begins at onboarding.

Precision supports a structured investor onboarding process designed to maintain complete and organized investor records from the outset.

This includes:

• • Collection and maintenance of investor KYC documentation.
• • Support for beneficial ownership documentation.
• • Source of wealth and source of funds documentation management.
• • PEP and sanctions screening administration.
• • Ongoing maintenance of investor due diligence records.

Well-organized onboarding records not only support compliance requirements but also reduce the likelihood of deficiencies being identified during regulatory reviews or independent AML audits.

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Maintaining Accurate Beneficial Ownership Records

One of the specific enhancements under the new AML Rule is the requirement that beneficial ownership information be maintained accurately, adequately and up-to-date, with periodic review rather than simple retention of documents.

Precision supports this objective through:

• • Ongoing maintenance of investor records.
• • Ownership structure documentation.
• • Tracking corporate investor changes.
• • Record retention and document management.

Maintaining accurate ownership information is increasingly important as regulators focus on transparency and audit readiness.

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Supporting a Risk-Based AML Framework

The new AML Rule reinforces the requirement for a documented risk-based approach to AML compliance. Funds are expected to understand and assess risks arising from investor types, geographies, products, services and delivery channels.

Through its investor administration processes, Precision helps maintain the underlying data that supports:

• • Investor risk profiling.
• • Geographic risk assessments.
• • Monitoring of ownership changes.
• • Ongoing compliance reviews.
• • Maintenance of investor compliance records.

Reliable and accessible investor information is often the foundation upon which effective risk assessments are built.

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Supporting Sanctions Compliance

The introduction of the new Sanctions Rule highlights the growing regulatory focus on sanctions screening and monitoring.

Precision supports sanctions compliance through:

• • Investor screening administration.
• • PEP screening support.
• • Maintenance of screening records.
• • Documentation retention.
• • Audit trail preservation.

Strong recordkeeping is often as important as the screening itself, as auditors and regulators frequently focus on evidence that controls have been consistently applied.

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Maintaining Audit-Ready Documentation

One of the most common challenges during audits is not the absence of controls, but the inability to produce supporting evidence efficiently.

Precision helps maintain:

• • Investor KYC files.
• • Subscription documentation.
• • Beneficial ownership records.
• • Investor communications.
• • Screening records.
• • Supporting compliance documentation.

By maintaining organized and accessible records, funds can respond more effectively to requests from directors, AMLCOs, regulators and independent auditors.

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Facilitating Independent AML Audits

The new AML Rule expressly requires independent AML audits to assess the effectiveness of a fund's AML compliance programme. Audit reports must also be submitted to CIMA following completion.

Although Precision is not the AMLCO and does not act as the independent AML auditor, we can play a critical role in supporting the audit process.

Our support includes:

• • Preparation of investor records and supporting documentation.
• • Efficient retrieval of information requested by auditors.
• • Coordination of document requests.
• • Assistance with investor file reviews.
• • Support for remediation of documentation deficiencies.

A well-maintained administration platform can significantly reduce the operational burden associated with an AML audit.

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Your Turnkey Partner for AML Audit Readiness

When your AML auditor arrives, Precision is ready.

Through our investor onboarding, KYC administration, investor record maintenance, beneficial ownership monitoring and audit-ready documentation processes, we support much of the operational information and evidence typically requested during an AML audit.

Our disciplined administration framework helps ensure that investor files, screening records, ownership documentation and supporting records are properly maintained, organized and readily accessible when needed by directors, AMLCOs, regulators or independent auditors.

While the AMLCO provides compliance oversight and the independent auditor performs the audit, Precision acts as the operational foundation behind the process. By appointing Precision as your fund administrator, AML audit readiness becomes embedded in your day-to-day fund operations, helping reduce audit disruption, strengthen governance and support compliance with the new CIMA AML Rule requirements.

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The Precision Advantage

A strong AML audit starts with strong fund administration.

By appointing Precision as your fund administrator, you gain more than NAV production and investor servicing. You gain a disciplined investor onboarding, KYC and recordkeeping framework designed to support your fund's AML compliance programme and evolving regulatory obligations.

In today's environment, good AML outcomes are not achieved solely through policies, procedures or annual reviews. They are built through consistent operational execution, accurate investor records and a robust administration framework.

Precision helps deliver exactly that foundation.

Sources: CIMA

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Quick AML Audit Readiness Check

How prepared is your fund for the new CIMA AML Audit requirements?

Use this simple checklist to assess your current level of preparedness.

Investor Records & KYC

• ☐ Investor KYC files are complete and centrally maintained
• ☐ Beneficial ownership information is up to date
• ☐ PEP and sanctions screening records can be readily produced
• ☐ Source of wealth and source of funds documentation is available where required
• ☐ Investor records are regularly reviewed and updated

Documentation & Record Keeping

• ☐ Subscription documents and investor records can be retrieved easily
• ☐ Compliance-related records are maintained in an organized manner
• ☐ Supporting documentation can be provided promptly upon request
• ☐ Investor ownership changes are properly documented

Risk Management

• ☐ The fund has a documented AML risk assessment
• ☐ Investor and geographic risks are periodically reviewed
• ☐ Material changes in the business trigger a reassessment of AML risks

AML Audit Readiness

• ☐ The fund can quickly produce records requested by an AML auditor
• ☐ Previous AML findings or deficiencies have been remediated
• ☐ Investor documentation is maintained in an audit-ready format
• ☐ Directors and AMLCO can easily access required compliance records

A Practical Observation

Funds answering "No" or "Not Sure" to several of the questions above may benefit from reviewing their investor onboarding, recordkeeping and AML administration processes.

In many cases, AML audit preparedness is less about implementing new policies and more about ensuring that investor records, KYC documentation, beneficial ownership information and supporting evidence are consistently maintained and readily accessible when required.

Please contact us to find out more how Precision team can assist you with.