Version 1.00 April 2020
Capria requires every fund receiving an investment to perform research on the beneficiary ownership level (of 10% and above) for all investors, control persons and equity holders in Fund Manager, General Partner, and Fund and to notify Capria immediately about any issues or risks identified through KYC research. The research at a minimum shall include:
- Accreditation of the investor, allowing investors to invest via a “private placement” or other exempt offerings (which most Funds and, possibly, some Fund Managers and General Partners will rely upon) per local financial regulations. The definition of an accredited investor (if any), the consequences of being classified as such, and the procedures for verifying the status of accredited investors (e.g, relying on self-certification, backup documentation or a third party to verify status) vary significantly among countries.
- Confirmation that prospective investors are not on the following lists:
- Confirmation with reasonable level of confidence that the investor will fulfill capital calls. This could be done by speaking to prior investees or backchanneling within the investing community. It can also be based on publicly available information, such as financial statements available on the internet. In some cases, an investor’s reputation or public knowledge of an investor’s status will suffice in this regard, e.g. for certain MNFIs, large public-employee pension plans and prominent foundations.
- Confirmation that the investor is not a high risk Politically Exposed Person (“PEP”). Please refer to recommendation 12 provided by the Financial Action Task Force, an inter-governmental body regarding PEPs. Pages 12 and 14 explain how to approach customer due diligence and management of associated risks in more detail.
- Confirmation that the investment is suitable for the investor and that the investor is sufficiently sophisticated and knowledgeable about private investments, i.e. so-called “toxic waste” language or similar representations and warranties.
- The Fund’s (and, if applicable, Fund Manager’s and General Partner’s) subscription materials should include representations and warranties and investor questionnaire items that adequately address the preceding items.
If a third party is being used to conduct KYC on a Fund’s behalf, these are the minimum requirements that must be met. We require this information about existing and future investors in the Fund Manager, General Partner and Fund with Fund Manager being required to certify compliance on an annual basis.
In case you have other key parties associated with the General Partner, we require
- Items 2 & 4 if they are a control person or IC member
- Items 1 through 6 if they are also investing capital.
Any questions regarding KYC procedures should be submitted to email@example.com