The Investor Experience: Managing Your Transfer Agent’s AML and Sanctions Program

August 22, 2023
  • Investor Services
BBH’s Amy Morris explains how the transfer agent’s AML/Sanctions program can help the fund and asset manager mitigate risks effectively while providing a best-in-class experience for their investors.

The pace of regulatory change is not slowing.

  • In June, global money-laundering watchdog the Financial Action Task Force (FATF) added Cameroon, Croatia, and Vietnam to the “grey list” of jurisdictions that are subject to increased monitoring.1
  • In March, five new countries were added to the European Commission’s list of high risk third countries.2
  • In February, FATF added Nigeria and South Africa to its list of jurisdictions under increased monitoring.3
  • In the same month, the EU added British Virgin Islands, Costa Rica, Marshall Islands, and Russia to its list of non-cooperative tax jurisdictions.4 As well as being added to that list, Russia was suspended from FATF membership.5

At the same time, regulators are increasing their pressure on fund managers to quickly act on these changes. Delegating certain day-to-day Investor AML/Sanctions activities to a transfer agent (TA) can help the fund manager navigate regulatory change effectively, but they are still responsible for how their organization responds.

What best practices would you advise a fund manager to follow to get the most out of their TA partnership?

The fund manager ultimately owns the regulatory obligations and risk. They also need to be mindful of the potential impact of shifting regulations on their investor experience. It’s important that they play an active role when outsourcing AML/Sanctions activities.

We’ve observed the following best practice characteristics among our fund manager clients: 

  • Open to recommendations and expert advice
  • Dedicated senior contact person who can make AML/Sanctions risk decisions
  • Connectivity between Compliance, Business and Distribution functions in-house
  • Willingness to collaborate with the TA on risk-based requirements

What AML/Sanctions program elements should a fund manager look for in a TA partner?

A truly global TA with a global TA AML/Sanctions program can help fund managers meet regulators’ expectations and mitigate risk, while helping the manager grow their assets. Helping clients comply with regulatory change is table stakes, but a truly differentiated TA partner that facilitates a smooth investor relationship should offer the benefits of:

  • A dedicated team that proactively monitors regulatory and industry developments that affect TA services and the documentation required of investors
  • Proactive, timely communication around regulatory change
  • Framework for collaboration on new requirements impacting the TA’s AML/Sanction program
  • Delivery of practical and scalable approaches to meeting regulatory requirements supported by access to the TA’s AML experts
  • Products and technology to provide real-time oversight and automate processes

How does BBH ensure that fund managers can adapt to a high volume of regulatory change while protecting the investor relationship?

While some regulatory changes can impact the fund manager’s investors in terms of the documentation required of them, most of it can and should be a seamless part of their onboarding into the fund. It should be handled in a way that minimizes the impact on investors. At BBH, we identify and manage regulatory and industry change to ensure compliance but also to minimize the impact to the investor experience.

Our differentiator is proactive partnership with our clients to navigate these regulatory changes.

Through our TA AML/Sanctions and Regulatory Product team, we communicate regulatory change affecting our services to clients on a regular basis through newsletters called T-UPs. This kind of timely communication from the TA to the fund manager, supplements the client’s independent obligations, underpinned by a dedicated approach to identifying and assessing regulatory and industry developments. This helps the manager to:

  • Navigate the ongoing regulatory developments successfully
  • Minimize risk of non-compliance
  • Position themselves well with their own regulator
  • Free up time to allow them to focus on growing its business

In addition, BBH’s TA AML/Sanctions program is set up to take regulatory change from words on a page into operational practice through:

  • Written procedures
  • TA AML/Sanctions training programs
  • Digital tools to track investor AML/KYC document requirements
  • A platform for digitized investor onboarding
  • Custom TA AML product solutions

For more information, please contact Amy Morris or any of our TA AML/Sanctions experts.

BBH can provide transfer agency services to fund products established in Luxembourg, Ireland, U.K., U.S., Cayman, Bermuda and Hong Kong. Click here for more information.

A Flying Through Digital Data Web Spy Tunnel, digital nodes and connection paths
Up Next
Up Next

The Investor Experience: How an Effective Transfer Agent can Help Managers Grow

BBH’s Denise Mak and David Weibe explain how the transfer agent, as a natural extension of the asset manager’s operating model, can facilitate an investor experience that is key to enabling growth.

1 FATF press release:
2 The Democratic Republic of Congo, Gibraltar, Mozambique, Tanzania and the United Arab Emirates were identified as having extreme deficiencies in their AML and countering the financing of terrorism regimes. Press release:
3 FATF press release:
4 European Council - Council of the European Union press release:
5 FATF press release:

Brown Brothers Harriman & Co. (“BBH”) may be used to reference the company as a whole and/or its various subsidiaries generally. This material and any products or services may be issued or provided in multiple jurisdictions by duly authorized and regulated subsidiaries. This material is for general information and reference purposes only and does not constitute legal, tax or investment advice and is not intended as an offer to sell, or a solicitation to buy securities, services or investment products. Any reference to tax matters is not intended to be used, and may not be used, for purposes of avoiding penalties under the U.S. Internal Revenue Code, or other applicable tax regimes, or for promotion, marketing or recommendation to third parties. All information has been obtained from sources believed to be reliable, but accuracy is not guaranteed, and reliance should not be placed on the information presented. This material may not be reproduced, copied or transmitted, or any of the content disclosed to third parties, without the permission of BBH. All trademarks and service marks included are the property of BBH or their respective owners. © Brown Brothers Harriman & Co. 2023. All rights reserved. IS-09061-2023-07-10

As of June 15, 2022 Internet Explorer 11 is not supported by

Important Information for Non-U.S. Residents

You are required to read the following important information, which, in conjunction with the Terms and Conditions, governs your use of this website. Your use of this website and its contents constitute your acceptance of this information and those Terms and Conditions. If you do not agree with this information and the Terms and Conditions, you should immediately cease use of this website. The contents of this website have not been prepared for the benefit of investors outside of the United States. This website is not intended as a solicitation of the purchase or sale of any security or other financial instrument or any investment management services for any investor who resides in a jurisdiction other than the United States1. As a general matter, Brown Brothers Harriman & Co. and its subsidiaries (“BBH”) is not licensed or registered to solicit prospective investors and offer investment advisory services in jurisdictions outside of the United States. The information on this website is not intended to be distributed to, directed at or used by any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Persons in respect of whom such prohibitions apply must not access the website.  Under certain circumstances, BBH may provide services to investors located outside of the United States in accordance with applicable law. The conditions under which such services may be provided will be analyzed on a case-by-case basis by BBH. BBH will only accept investors from such jurisdictions or countries where it has made a determination that such an arrangement or relationship is permissible under the laws of that jurisdiction or country. The existence of this website is not intended to be a substitute for the type of analysis described above and is not intended as a solicitation of or recommendation to any prospective investor, including those located outside of the United States. Certain BBH products or services may not be available in certain jurisdictions. By choosing to access this website from any location other than the United States, you accept full responsibility for compliance with all local laws. The website contains content that has been obtained from sources that BBH believes to be reliable as of the date presented; however, BBH cannot guarantee the accuracy of such content, assure its completeness, or warrant that such information will not be changed. The content contained herein is current as of the date of issuance and is subject to change without notice. The website’s content does not constitute investment advice and should not be used as the basis for any investment decision. There is no guarantee that any investment objectives, expectations, targets described in this website or the  performance or profitability of any investment will be achieved. You understand that investing in securities and other financial instruments involves risks that may affect the value of the securities and may result in losses, including the potential loss of the principal invested, and you assume and are able to bear all such risks.  In no event shall BBH or any other affiliated party be liable for any direct, incidental, special, consequential, indirect, lost profits, loss of business or data, or punitive damages arising out of your use of this website. By clicking accept, you confirm that you accept  to the above Important Information along with Terms and Conditions.

1BBH sponsors UCITS Funds registered in Luxembourg, in certain jurisdictions. For information on those funds, please see

captcha image

Type in the word seen on the picture

I am a current investor in another jurisdiction