BVCA Taskforce announces fundraising recommendations

The task force to examine fundraising guidelines set up by BVCA chairman Edmund Truell and chaired by BVCA executive director Jennifer English (22 October 2001, page 13) has published its recommendations. In the light of increased pressure across the financial world to both be beyond reproach and to be seen to be beyond reproach, the BVCA task force set out to establish whether or not clearer guidelines were required to demonstrate that private equity funds originated from legitimate sources. However, the task force concluded that the private equity industry should be classified as low risk, reflecting the generally long investment time frames and relative illiquidity of the asset class. Nonetheless the task force has made the following recommendations, which are intended to help demonstrate the industry’s commitment to best practice:·

(1) Reporting and recording – Members should urgently review their reporting and recording procedures to ensure that they are adequate.·

(2) Conflicts of interest – Mechanisms should be put in place to help resolve any internal conflicts and executives should be required to report any doubts.·

(3) Introductions by intermediaries – Members should ensure that all executives are alert to their existing obligations to investigate further and/or report to the National Criminal Intelligence Service any suspicions concerning particular transactions.·

(4) Sources of funding – Members should investigate further as appropriate if they have doubts of a fund investor’s wealth and, if necessary, report the matter to their money laundering reporting officer.·

(5) Co-investment – Members should be alert to the need to consult and pay full regard to the black lists of individuals and countries.·

(6) Training – The BVCA should provide training on money laundering avoidance.

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