A Comprehensive Guide to CAMS KRA KYC Update: Ensuring Compliance and Securing Your Business

Introduction

With the ever-evolving regulatory landscape, staying compliant with the latest Know Your Customer (KYC) regulations is crucial for financial institutions and businesses operating in Kenya. The Capital Markets Authority of Kenya (CMA) has introduced a new KYC update for all Collective Investment Schemes (CIS) and Fund Managers, known as the CAMS KRA KYC Update. This comprehensive guide will provide you with an in-depth understanding of the CAMS KRA KYC Update, its requirements, and a step-by-step approach to ensure compliance.

What is the CAMS KRA KYC Update?

The CAMS KRA KYC Update is a regulatory requirement issued by the CMA in collaboration with the Kenya Revenue Authority (KRA). It aims to enhance the level of KYC compliance within the financial sector and combat financial crimes, such as money laundering and terrorist financing. The update mandates all CIS managers and Fund Managers to collect and verify the KYC information of their investors and report this information to the KRA through the CAMS platform.

Benefits of the CAMS KRA KYC Update

• Enhanced Regulatory Compliance: Complying with the CAMS KRA KYC Update ensures that financial institutions meet the stringent regulatory requirements set by the CMA and KRA.
• Improved Risk Management: KYC procedures help identify and mitigate financial crime risks associated with customers and transactions.
• Protection of Reputation: By conducting thorough KYC due diligence, businesses can protect their reputation and avoid potential legal and financial penalties associated with non-compliance.
• Access to Financial Services: KYC compliance enables individuals and businesses to access financial services and products with confidence and trust.

Key Requirements of the CAMS KRA KYC Update

The CAMS KRA KYC Update requires financial institutions and fund managers to collect and verify the following KYC information from their investors:

• Personal Information: Name, address, ID number, nationality, occupation, source of funds
• Identification Documents: Passport, National ID card, driver's license
• Proof of Address: Utility bill, bank statement, rental agreement
• Source of Wealth: Employment details, business documentation, inheritance evidence
• Beneficial Ownership: Information about the ultimate beneficial owners of the account

Step-by-Step Approach to CAMS KRA KYC Update Compliance

1. Registration and Onboarding:

• Register with the CAMS portal and create an account.
• Onboard your investors by collecting their KYC information through the CAMS platform.

2. KYC Verification:

• Verify the KYC information of your investors using trusted sources and methods.
• Obtain original documents or certified copies for ID verification.

3. Reporting to KRA:

• Submit the verified KYC information of your investors to the KRA through the CAMS platform.
• Obtain transaction approval numbers (TANs) for all investment transactions.

4. Ongoing Monitoring:

• Continuously monitor and review your investors' KYC information to ensure it remains up-to-date.
• Report any suspicious transactions or changes in customer behavior to the CMA and KRA.

FAQs

1. What is the deadline for CAMS KRA KYC Update compliance?

• The deadline for compliance is 30th June 2023.

2. What are the penalties for non-compliance?

• Failure to comply with the CAMS KRA KYC Update may result in regulatory action, fines, and reputational damage.

3. Can I outsource my KYC procedures?

• Yes, you may outsource your KYC procedures to a third-party service provider that is approved by the CMA.

4. What is the role of CAMS in KYC Update compliance?

• CAMS is a platform that facilitates the collection, verification, and reporting of KYC information to the KRA.

5. How can I obtain technical assistance with CAMS?

• You can contact the CAMS support team at [email protected] for technical assistance.

6. Where can I find more information about the CAMS KRA KYC Update?

• Visit the CMA website (www.cma.or.ke) or the CAMS website (www.cams.or.ke) for more information.

Call to Action

Ensuring compliance with the CAMS KRA KYC Update is essential for all financial institutions and fund managers operating in Kenya. By following the requirements, implementing effective KYC procedures, and staying up-to-date with regulatory changes, you can protect your business, enhance your reputation, and contribute to a secure financial system.

Additional Resources

• CMA Circular No. 11/2022 on CAMS KRA KYC Update

• CAMS User Guide

Humorous Stories

Story 1:

A fund manager was reviewing the KYC information of a new investor when he noticed an item under "Occupation" that read "Professional Couch Potato." Curious, he called the investor to inquire further. The investor replied with a chuckle, "Well, I've spent years perfecting my Netflix-watching skills and I'm quite good at it."

Lesson: KYC checks can sometimes reveal unexpected but amusing insights into your investors.

Story 2:

A CIS manager was struggling to obtain a proof of residence from an investor who claimed to live in a treehouse. After several frustrated phone calls, the manager finally sent an employee to the investor's address. To his surprise, the employee found the investor living comfortably in an elaborate treehouse with all the modern amenities.

Lesson: Never assume anything when conducting KYC procedures. Be prepared for the unexpected.

Story 3:

A financial institution received a KYC application from an individual who claimed to be the CEO of a company called "Unicorn R Us." Intrigued, the analyst reached out to the company only to discover that it was a small pet grooming business specializing in unicorns (of the furry, four-legged variety).

Lesson: KYC can be a valuable tool for uncovering creative business ventures.

Useful Tables

Table 1: CAMS KRA KYC Update Timeline

Table 2: CAMS KRA KYC Update Reporting Requirements

Table 3: Penalties for Non-Compliance with CAMS KRA KYC Update