The Cayman Islands Monetary Authority’s new AML Compliance Programme Rule and Financial Sanctions and Targeted Financial Sanctions Rule take effect on 18 September 2026.
There is considerable detail in the new framework, but one aspect I find particularly important is the emphasis on effectiveness; not simply whether the appropriate policies, appointments and arrangements are in place.
For regulated investment funds, this is particularly relevant where substantial parts of the operating and compliance framework are outsourced.
The AML audit requirement is not new
One point worth clarifying is that the requirement for an independent AML audit requirement itself is not new.
CIMA confirms that a regulated investment fund must undertake an AML Audit under the existing Anti-Money Laundering Regulations, including where all, or substantially all, of its operations are outsourced.
The new Rule provides additional clarity around CIMA’s supervisory requirements and how the effectiveness of a Compliance Programme should be demonstrated.
There is also no prescribed audit frequency. CIMA gives examples of an AML Audit approximately every two years for a higher-risk financial services provider, three years for medium risk and four years for lower risk. These are examples rather than prescribed cycles.
The Rule does, however, require at least one external AML audit for every three independent audit cycles.
Independence is also important. CIMA states that AMLCOs, MLROs and DMLROs cannot independently audit activities for which they are responsible, whether those functions are performed internally or outsourced.
Outsourcing and the question of assurance
The more interesting aspect is what CIMA says about outsourced operating models.
Investment funds frequently rely on administrators and other specialist providers to perform significant elements of their operations and AML functions. CIMA recognises this and permits an outsourced service provider’s independent audit report to be considered as part of the fund’s internal control and oversight arrangements.
But outsourcing does not remove the fund’s responsibility for demonstrating that its Compliance Programme is effective.
The Governing Body remains responsible for demonstrating that an outsourced service provider’s audit report provides sufficient, objective assurance over the effectiveness of the fund’s own Compliance Programme.
This is where fund-specific assurance becomes important.
CIMA makes clear that relying solely on a service-provider-level internal audit or population-based review will not provide sufficient assurance where there is insufficient evidence regarding the individual fund’s Compliance Programme.
A service provider may have established institutional controls and a comprehensive compliance framework. The separate consideration for the fund is whether there is sufficient evidence and oversight to understand how those controls operate in relation to the fund itself.
A greater focus on effectiveness
The separate Financial Sanctions and Targeted Financial Sanctions Rule also takes effect on 18 September.
Its scope differs from the AML Compliance Programme Rule. CIMA states that the Sanctions Rule applies to all Regulated Persons supervised by CIMA under the Regulatory Acts, irrespective of whether they conduct Relevant Financial Business.
Taken together, the Rules bring greater clarity to CIMA’s expectations around effective compliance programmes, independent assurance, oversight of outsourced arrangements and financial sanctions compliance.
For me, one of the more important aspects of the new framework is this emphasis on effectiveness.
For funds operating through extensively outsourced models, the consideration is not simply whether the appropriate functions, providers and policies are in place. It is also whether the Governing Body has sufficient oversight and assurance to understand how those arrangements are operating in practice.
With the Rules taking effect on 18 September 2026, this is a timely point for regulated investment funds and their governing bodies to review their existing arrangements against CIMA’s requirements.
This article reflects my reading of CIMA’s published materials and is shared for general information only. It does not constitute legal or regulatory advice.
I recently contributed to a Bloomberg article examining tax developments in China and their implications for investors. As I shared with Bloomberg:
“The importance of tax factors will further increase.”
As capital, investments and wealth become increasingly international, keeping pace with tax and regulatory developments across jurisdictions is becoming an important part of understanding the obligations that may arise.
The broader consideration extends beyond any individual tax measure or market.
Cross-border investment and wealth structures can involve multiple jurisdictions, each with its own tax, regulatory, reporting and compliance requirements. At the same time, greater transparency and information exchange between jurisdictions mean these considerations are becoming increasingly interconnected.
For investors, managers, family offices and their advisers, this places greater emphasis on staying informed about regulatory and tax developments in the markets relevant to them, and understanding how different obligations may interact across jurisdictions and structures.
This does not mean that every regulatory development changes an investment or structuring decision. It does mean that understanding the wider regulatory environment, and how it continues to evolve, is becoming an increasingly important part of managing capital and wealth internationally.
Quoted by Bloomberg
China Investors Have a New Tax Risk to Reckon With: Taking Stock
Following the STEP update shared previously on this framework, Law360 Tax Authority interviewed a range of practitioners, including Agnes Chen, on China’s new offshore trust tax rules under Announcement No. 21 of 2026, issued jointly by China’s Ministry of Finance and State Taxation Administration on 24 July 2026.
The framework sets out how China’s individual income tax rules apply to offshore trusts across different stages of their life cycle. Where a resident individual transfers property into an offshore trust, the transfer may give rise to taxable property-transfer income, generally calculated by reference to the market value of the property less its original cost and reasonable expenses. During the life of the trust, income generated by the offshore trust and relevant offshore entities it holds, controls or manages may be attributed annually to the resident individual for individual income tax purposes, whether or not that income is actually distributed.
The Announcement also provides transitional treatment for certain historical liabilities. It addresses unpaid individual income tax relating to property transferred into offshore trusts by resident individuals between 1 January 2023 and 31 December 2025, as well as certain income generated by resident individuals’ offshore trusts before 1 January 2026. Relevant tax is required to be declared and paid within 90 days from the Announcement taking effect, with no late-payment surcharge imposed during that period.
Agnes noted that “it is too early to say how investors will ultimately respond”, while highlighting that the framework brings offshore trusts more clearly within China’s existing worldwide income tax system. As reflected in the authorities’ explanation of the policy, the framework seeks to apply existing law more clearly to offshore trusts while maintaining a reasonable tax burden through measures including foreign tax credits and relief from repeated taxation.
References
Ministry of Finance & State Taxation Administration, Announcement No. 21 of 2026, Announcement on Individual Income Tax Matters Relating to Offshore Trusts, 24 July 2026.
Shanghai Securities News published a feature on 11 August, “The Fund Industry’s Path Abroad” (基金业“出海”进阶路), looking at how China’s asset management industry is internationalizing across products, operating capabilities and supporting services.
As Vice President of COPFA (中资海外私募基金协会 / Chinese Overseas Private Funds Association), I was pleased to contribute a practitioner’s perspective to the discussion.
One development worth watching is how, as private fund managers expand internationally, the professional services ecosystem around them becomes increasingly important. Managers need access to experienced fund custody, fund administration, legal, audit and compliance providers across the markets in which they operate, bringing together the capabilities needed to support cross-border asset management.
International expansion is therefore rarely just about establishing a fund or launching a product in another jurisdiction. It also requires access to the broader operating and professional services infrastructure needed to operate effectively across markets.
As the internationalisation of China’s fund industry progresses, the focus will increasingly extend beyond where funds are established to how managers build the operating relationships and infrastructure needed across markets. This broader ecosystem will be an important part of the industry’s next stage of development.
Thank you to the reporters and editorial team at Shanghai Securities News for inviting COPFA to contribute to the feature.
The Society of Trust and Estate Practitioners (STEP) has published an update on Announcement No. 21 of 2026, issued by China’s Ministry of Finance on 24 July 2026, concerning the individual income tax treatment of offshore trusts.
The rules treat a resident individual’s transfer of property into an offshore trust as a taxable deemed disposal. It is noted that the framework extends to offshore trusts funded by both Chinese tax residents and non-residents, and focuses on the “resident contributor” (the individual who actually funded, bore the cost of, or controlled the property) rather than the nominal settlor named in the trust deed.
It is also noted that the rules do not purport to invalidate a trust or its civil law effects under the governing trust law, but instead treat the trust as a pass-through vehicle for the purpose of calculating individual tax liabilities.
Contributed some perspectives to Thomson Reuters Regulatory Intelligence’s latest piece on source of wealth verification in Singapore’s wealth management sector.
The article explores both the regulatory direction and some of the practical questions around implementation, an area I’ve spent a fair amount of time on over the years, across policy, operations and client onboarding. Worth a read if you’re working in or around this space. Thank you Yixiang Zeng, CUBE Global once again for the opportunity to contribute.
Excited to share that I was featured in AsianInvestor, contributing insights on how APAC Insurtech is attracting impact-minded institutions. Thank you, Indira Vergis, for highlighting this important discussion. It’s inspiring to see how innovation and purpose can drive meaningful change in our region.
COPFA celebrated a successful inaugural in-person launch event in Singapore. The event highlighted COPFA’s dedication to fostering connections and collaborations with international industry bodies to reinforce industry-wide partnerships, and it was met with a positive reception from the audience.
Proud to have been featured in Asian Private Banker discussing the evolving landscape of private markets in APAC. 🌏 As private markets continue to grow, maintaining transparency and investor protection becomes increasingly critical.
It was such an enjoyable interview. Sincere appreciation to CHINESE OVERSEAS PRIVATE FUNDS ASSOCIATION 中资海外私募基金协会 (COPFA) and Howard Ching on recommendation for this interview.
I am happy to have the opportunity to cover many meaningful touchpoints especially on leadership, women engagement, diversity and ensuring constant keeping up to date and overcoming operational and regulatory challenges in such dynamic and ever-evolving landscape!
I was asked for a sound bite or a motto I live by, I very naturally went with what I pride myself everyday when working with our teams, clients, partners. Passion and Love for what I do has been the key for me, I started out in the Industry fresh and new but fate always got me back to the space in fiduciary services. Being able to start from the humble beginnings allowed me to understand all basic and key aspects of operations and allowed me to continue to stay very hands on with the work we do for our clients and partners till today, I am grateful for the trust and confidence they have in me. This has also kept a very close and collaborative team where they could always rely back on their leader like Family.
I’m very glad that I have the trust and motivation to stay passionate and continue to love what I do and every path I take being a meaningful journey in life!
LeaderLens Interview
A Strategic Partnership for Global Fund Management
CSC is a trusted provider of specialized business, legal, tax, and compliance services, helping organizations navigate complex regulatory environments and expand globally. With over 120 years of experience, CSC supports businesses of all sizes across more than 140 jurisdictions. The company offers a broad range of solutions, including fund administration, corporate services, entity management, capital markets support, and digital brand protection.
What sets CSC apart is its commitment to personalized customer service, with dedicated account experts offering live, tailored support. CSC also ensures the highest levels of data security through world-class, ISO 27001–certified facilities and rigorous SOC 2® Type II assessments.
Whether assisting with fund administration, trust services, or compliance management, CSC is known for its industry expertise and ability to develop custom solutions to meet each client’s unique challenges. Their mission is to help businesses grow, thrive, and maintain compliance in an increasingly complex global marketplace.
Agnes Chen Meiyun is a highly accomplished financial and management professional with over 20 years of experience in the finance, trust, and wealth management sectors. As the regional managing director of CSC for the APAC region, Agnes oversees specialized administration services across APAC and conversant across many jurisdictions, focusing on funds, corporates and trust structures. Her deep expertise spans fund administration, trust structuring, compliance, risk management, and anti-money laundering governance, making her a key leader in managing complex financial operations.
Recognized as a Top LinkedIn Power Profile in the financial sector in 2019 and one of Asia’s Top 10 CEOs in 2021, Agnes is known for her strategic leadership and ability to navigate the evolving regulatory landscapes. She holds professional qualifications as a Trust and Estate Practitioner (STEP) and a member of the International Compliance Association (MICA). Passionate about driving growth and delivering value, Agnes plays a pivotal role in helping clients invest and thrive globally, while remaining at the forefront of financial innovation and governance.
COPFA Collaboration and Challenges
Mike Sim:How does COPFA collaborate with organizations like CSC to help Chinese fund managers navigate global regulatory environments and enhance compliance standards?
Agnes Chen: Basically, COPFA provides resources to local Chinese managers. It is a forum where they can find the correct quorum and eliminate unnecessary noise. CSC is a global solutions provider with strong local expertise that helps asset managers to expand and collaborate, providing holistic solutions tackling fund administration, structuring, operational efficiency, governance and global regulation.
Mike Sim:What are some of the key challenges Chinese fund managers face when expanding overseas, and how does COPFA, in partnership with firms like CSC, help them overcome these hurdles?
Agnes Chen: The challenge is to align with global standards. Many managers, both in and outside of China, are faced with information overload. Aside from regulatory websites, it can be difficult to determine what information is accurate.
The regulatory landscape is constantly changing, and fund managers need to keep up with enhancements and adapt to the evolving sector.
Our regulatory and compliance services and local expertise mean that they can meet their obligations across jurisdictions – and do so with confidence.
Challenges in Leadership and Management
Mike Sim:What has been the most challenging part of managing CSC’s APAC operations, especially across such diverse and fast-changing markets?
Agnes Chen: With regulations ever evolving, being the first to know, understand, and communicate with clients is essential.
We have a dynamic workforce with strong local expertise, and it is important to constantly motivate the team, provide growth opportunities for them, and clear strategic direction.
Mike Sim:With over 20 years of operational and management experience, what are some of the key lessons you’ve learned that shaped your leadership approach today?
Agnes Chen: In my 20 years of experience, I’ve had quite a diverse background, starting from an administrative level.
This journey has allowed me to understand the pain points and concerns, which helps me bring everyone together. I have covered many structures in the industry, giving me a well-rounded perspective to support our clients and teams.
Mike Sim:You’ve held roles across various sectors, including finance, compliance, and wealth management. How has this multidisciplinary experience influenced the way you approach problem-solving and decision-making?
Agnes Chen: I understand the wants and needs of different sectors. By putting myself in their shoes, I can smooth communication and bridge gaps.
This helps in delivering what is required to complete tasks effectively.
People are key for us; they are our number one priority, and I strive to create a culture where we work like a family.
Insights into CSC’s Success
Mike Sim: CSC is known for its unmatched customer support and industry expertise. How do you ensure that the company continues to offer such a high level of service while expanding globally?
Agnes Chen: It goes back to our group culture, which focuses on agility, teamwork, and the ability to serve. Our mindset has always been that the client is number one, and on top of that, employee satisfaction is crucial. Customer service has been our top priority.
Mike Sim:CSC operates in over 140 jurisdictions. How do you manage the complexities of regulatory compliance and local challenges while maintaining a unified global vision?
Agnes Chen: We maintain global compliance standards that align with local regulations. Understanding the specific standards for each jurisdiction, like MAS and ACRA guidelines in Singapore, is crucial.
Staying informed involves a lot of reading, research, and understanding.
Advice for Aspiring Leaders
Mike Sim:What advice would you give to women aiming to break into leadership positions in traditionally male-dominated sectors such as finance and corporate governance?
Agnes Chen: The organization you choose to work for matters a lot. I feel fortunate to work in organizations that value everyone.
Throughout my career, I’ve had great employers who do not restrict opportunities based on gender. What matters most is doing your best.
Mike Sim:What qualities or skills do you think are essential for someone looking to excel in a high-level management position in the finance or corporate services industry?
Agnes Chen: Being able to show empathy and connect with the team is essential. I strive to connect with my team, empower and delegate responsibilities clearly, so the team knows what they need to do. A strong team is crucial for long-term success, and we have teams who have been with us for many years.
Future of Fund Administration and Wealth Management
Mike Sim:In your opinion, how do you see the landscape of fund administration and wealth management evolving over the next 3 to 5 years, especially in the APAC region?
Agnes Chen: In general, both fund administration and wealth management will continue to grow in the APAC region. The key jurisdictions we focus on depend on economic trends. Regulatory bodies are working diligently to establish global standards, and fund administrators will increasingly cement themselves as strategic partners that help asset managers stay compliant and operate efficiently.
Mike Sim:With digital transformation reshaping many industries, what role do you see technology playing in the future of fund administration and corporate governance?
Agnes Chen: Technology will play a pivotal role in enhancing processes through automation and analytics, helping to provide insights and reports. My favourite topic is AI, which is increasingly relevant in the finance industry, especially for regulatory compliance. AI will play a crucial role in providing efficiency, analysing documents, and checking for compliance.
Role of Compliance and Risk Management
Mike Sim:How have you seen the compliance landscape change over the past decade, particularly with new regulations around anti-money laundering and corporate governance?
Agnes Chen: The compliance landscape is advancing rapidly, with more regulatory standards being implemented. The enhancement of technologies and processes has made governance a fundamental aspect of our industry, providing investors with the assurance they seek.
Thoughts on the Global Economic Climate
Mike Sim:How is CSC preparing to navigate potential regulatory changes and economic shifts that may occur globally in the next 3-5 years?
Agnes Chen: We are committed to staying updated on regulatory changes through training and being proactive. By positioning ourselves as thought leaders, we engage with industry partners and contribute to consultation papers and roundtables to guide the industry along the way.
Innovation in Financial Services
Mike Sim:How do you ensure CSC’s offerings are agile and flexible enough to adapt to the rapidly evolving needs of clients across multiple jurisdictions?
Agnes Chen: CSC aims to continue to be a key global administrator in the industry —a one-stop shop that covers everything the market requires. We adapt as clients come to us with new requests, allowing us to stay relevant as the market evolves.
Personal Growth and Development
Mike Sim:As a highly visible leader in the financial sector, what do you do to stay ahead of trends and continuously develop your skills?
Agnes Chen: I read extensively—not just news but also regulatory websites and regulatory extracts and guidance papers. I stay on top of regulatory changes in places like Cayman, Singapore, and Hong Kong.
Staying informed allows me to present accurate and relevant information to our stakeholders.
Advice for Navigating Complexity in Financial Structures
Mike Sim:You are highly conversant in complex financial structures, including private trusts, fund documentation, and M&A transactions. What advice would you give to young professionals looking to master these complex areas of finance?
Agnes Chen: An open mindset toward learning is crucial. As you start in the industry, being open to opportunities to learn will help you understand complex structures. This understanding will connect things together and give you the big picture.
Agnes Chen with Mike Sim
Thank you, Agnes, for taking the time to provide such thoughtful insights into leadership and industry trends.
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