Case Study · Fund Administration & Financial Services
How a US Fund Administration Firm Uses KYCsphere to KYC and Screen its Fund Investors
A US-based fund administration firm deployed KYCsphere to onboard, screen, and continuously monitor the investors and limited partners subscribing across its administered funds — meeting FinCEN, SEC, and BSA compliance obligations at scale.
100%
Investors and LPs screened at subscription and on an ongoing basis across all administered funds
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Centralised compliance platform managing investor KYC across all funds
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Manual screening processes — sanctions, PEP and adverse media checks fully automated
| Client | Confidential — US-Based Fund Administration Firm |
| Headquarters | United States |
| Industry | Fund Administration & Financial Services |
| Funds Administered | Multiple Private Equity, Hedge & Alternative Investment Funds |
| Regulatory Framework | FinCEN · Bank Secrecy Act (BSA) · SEC · Customer Identification Program (CIP) |
| Tools Deployed | KYC Onboarding · Sanctions Screening · PEP & Adverse Media · Alert Management |
The Compliance Obligation for Fund Administrators
Fund administrators occupy a critical position in the alternative investment ecosystem. They manage the back-office operations of private equity, hedge, and alternative investment funds — maintaining fund records, calculating NAV, processing investor subscriptions and redemptions, and maintaining the register of limited partners (LPs) and other fund investors.
In doing so, fund administrators take on significant AML/KYC obligations of their own. Under the Bank Secrecy Act (BSA), FinCEN regulations, and SEC guidance, fund administrators are required to implement a Customer Identification Program (CIP) and perform due diligence on every investor subscribing to a fund they administer — screening them for sanctions exposure, PEP status, and adverse media at the point of subscription, and monitoring them on an ongoing basis throughout the life of the fund.
The Look-Through Requirement — The Hardest Part of Fund Investor KYC
When a fund investor is a corporate entity — a holding company, a family office, a trust, or another fund — FinCEN’s CIP rules require the fund administrator to look through the entity structure to identify and verify the ultimate beneficial owners (UBOs) behind it. This means KYC obligations extend not just to the subscribing entity but to its directors, controlling shareholders, and any individual with significant ownership or control. For a fund with a large and diverse investor base, managing this look-through requirement manually — across multiple funds and investor structures — creates significant operational and compliance risk.
Why PEP Screening Cannot Rely on Static Lists
Fund investors who are Politically Exposed Persons — or who have PEP connections through directors or beneficial owners — represent a heightened AML risk that fund administrators must identify and manage. Critically, there are no officially published PEP lists maintained by any regulatory authority. KYCsphere addresses this by performing PEP checks in real time across thousands of authentic global news sources, government portals, regulatory announcements, and open-source intelligence feeds — surfacing PEP connections as they emerge rather than relying on static databases that may miss local politicians, regional officials, and lesser-known government figures who still represent genuine risk.
Client Background
This US-based firm provides fund administration services to a diverse portfolio of private equity, hedge, and alternative investment funds. Its investor base spans a wide range of investor types — institutional investors, family offices, high-net-worth individuals, corporate entities, and fund-of-funds structures — many with complex ownership arrangements requiring careful KYC and look-through analysis.
With investors subscribing across multiple funds, each subject to its own offering documents, subscription agreements, and compliance requirements, the firm needed a structured, centralised platform to manage investor KYC consistently — capturing all investor and related party information, running mandatory compliance checks at subscription, and maintaining ongoing monitoring across the full investor register without creating a separate compliance process for each fund.
The Challenge
Managing AML/KYC compliance for fund investors across multiple administered funds — each with its own investor register — was creating significant operational complexity and compliance risk without a unified platform in place.
No centralised investor KYC platform — investor due diligence was managed separately for each fund with no common framework, no shared records, and no consistent standard of compliance documentation across the investor register.
Look-through compliance was manual and inconsistent — identifying and screening the beneficial owners behind corporate investor structures required manual research, creating gaps in UBO coverage and making it impossible to maintain consistent look-through compliance at scale.
No systematic PEP screening at subscription — without a structured screening process, there was no reliable way to identify PEP-connected investors or beneficial owners at the point of subscription — particularly for investors with connections to lesser-known government officials not covered by commercial databases.
No ongoing monitoring across the investor register — once an investor was onboarded, there was no mechanism to detect changes in sanctions status, new PEP designations, or adverse media findings emerging during the life of the fund.
Audit trail gaps across multiple funds — without a centralised system, maintaining a complete, consistent, and auditable record of investor KYC across all administered funds — ready for regulatory examination — was extremely difficult to sustain.
The Solution
KYCsphere was deployed as the firm’s centralised investor compliance platform — providing a single system for onboarding every fund investor and their associated individuals, running mandatory AML screening at subscription, and maintaining continuous monitoring across the full investor register throughout the life of each fund.
Investor Onboarding & Due Diligence
Every fund investor — individual or entity — is onboarded into KYCsphere with a structured compliance profile capturing investor details, directors, controlling shareholders, beneficial owners, and related parties. For corporate investors, the look-through structure is captured fully, ensuring UBO coverage from the first day of the subscription relationship.
Sanctions Screening
Every investor and their associated individuals are automatically screened against OFAC SDN, UN Consolidated, EU Sanctions, and UK Sanctions lists at subscription and through ongoing periodic batch scans — ensuring no sanctioned investor or beneficial owner enters or remains on the fund register.
PEP & Adverse Media Search
Rather than relying on static commercial databases, KYCsphere screens every investor and related party in real time across thousands of authentic global news sources, government portals, regulatory announcements, and open-source intelligence feeds — identifying PEP connections and adverse media findings as they emerge, including for local politicians and regional officials that databases routinely miss.
Alert Management
When ongoing monitoring detects a sanctions hit, PEP designation, or adverse media finding for any investor or related party across any administered fund, a risk-rated alert is automatically generated and assigned to the compliance team for review and documented action — with a complete audit trail maintained against the investor’s record.
How it Works — The Investor Compliance Lifecycle
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Investor Subscription
A new investor submits a subscription to a fund. The investor — whether an individual, corporate entity, family office, or fund-of-funds — is onboarded into KYCsphere with full KYC details captured including directors, shareholders, beneficial owners, and related parties.
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Look-Through & UBO Identification
For corporate investors, KYCsphere captures the full beneficial ownership structure — looking through holding entities to identify the ultimate individuals with significant ownership or control, meeting FinCEN CIP look-through requirements from the outset.
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Screening at Subscription
Sanctions, PEP, and adverse media checks run immediately across the investor and all associated individuals — giving the compliance team a complete AML risk picture before the subscription is approved and the investor is admitted to the fund register.
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Ongoing Monitoring Throughout the Fund Life
KYCsphere continuously monitors every investor and related party across thousands of live global sources throughout the life of the fund. New sanctions designations, PEP connections, or adverse media findings trigger automatic alerts — catching risks as they arise rather than at the next periodic review.
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Alert Review & Audit Trail
Every alert is reviewed and documented in KYCsphere against the investor’s record — maintaining a complete, auditable compliance history across all investors and all administered funds, ready for FinCEN, SEC, or BSA examination at any time.
The Results
With KYCsphere managing investor compliance across all its administered funds, the firm now has a structured, automated, and fully auditable AML programme for its full investor register — meeting FinCEN, BSA, and SEC expectations without the manual overhead that previously made consistent compliance across multiple funds difficult to sustain.
- Centralised investor KYC across all administered funds— a single platform managing the full investor compliance lifecycle across every fund, with a consistent standard of due diligence applied to every subscription regardless of fund structure.
- Look-through compliance at scale— KYCsphere captures the full beneficial ownership structure of every corporate investor from day one, ensuring UBO identification and screening meets FinCEN CIP look-through requirements consistently across the investor register.
- PEP connections identified in real time— real-time screening across thousands of live global sources means PEP-connected investors and beneficial owners are identified as connections emerge — including local politicians and regional government officials that static databases routinely miss.
- Continuous monitoring throughout the fund life— every investor and related party is monitored automatically throughout the fund’s life, with alerts triggered immediately when sanctions status, PEP designations, or adverse media findings change.
- Single auditable compliance record per investor— all KYC data, screening results, alerts, and review decisions held centrally against each investor’s record across all funds — giving the firm a clear, documented compliance history ready for regulatory examination at any time.
Managing Investor KYC across Multiple Funds?
KYCsphere helps fund administrators onboard, screen, and continuously monitor investors and limited partners across all administered funds — meeting FinCEN, BSA, and SEC compliance obligations at scale.
