Featured Product

    ESAs Issue Regulatory Standards to Enhance Management of ML/TF Risks

    December 06, 2017

    ESAs published a final report on joint draft regulatory technical standards specifying the way credit and financial institutions should manage money laundering and terrorist financing (ML/TF) risks. These standards apply at the group level, where they have branches or majority-owned subsidiaries based in third countries whose laws do not permit the application of group-wide policies and procedures on anti-money laundering and countering the financing of terrorism (AML/CFT).‎ These regulatory standards shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. These shall apply from three months after the entry into force.

    The regulatory technical standards have been drafted in accordance with Article 45(6) of Directive (EU) 2015/849. Credit and financial institutions have to put in place and maintain AML/CFT policies and procedures to assess and manage effectively the ML/TF risks to which they are exposed. Where they are part of a group, these AML/CFT policies and procedures have to be applied at group-level. This can be challenging where branches or majority-owned subsidiaries are located in a third country, outside of the European Economic Area (EEA), whose law may not permit the application of some or all parts of a group's AML/CFT policies and procedures. In such cases, credit and financial institutions must take effective steps to manage the resultant ML/TF risk.

    The draft regulatory technical standards require credit and financial institutions to determine the extent of the measures on a risk-sensitive basis and be able to demonstrate to their competent authorities that the steps taken are commensurate with the ML/TF risk. In exceptional cases where, after taking all possible steps, ML/TF risk cannot be mitigated effectively, credit and financial institutions will have to require their branch or majority-owned subsidiary to terminate the business relationship, or not to carry out the occasional transaction, decide to close down some or all of their operations in the third country. ESAs publicly consulted on these draft standards between June and July 2017. Minor changes were brought to the draft as a result of comments received. ESAs will submit these draft regulatory technical standards to EC for approval. The regulatory standards are part of the ESAs' wider work on fostering a common approach to AML/CFT and will contribute to creating a level playing field across the financial sector in EU. 

     

    Related Links 

     

    Keywords: Europe, Banking, Securities, AML/CFT, ML/TF_Risk, RTS, ESA

    Related Articles
    News

    FSB Publishes List of Global Systemically Important Banks for 2019

    FSB published the 2019 list of global systemically important banks (G-SIBs), using the end-2018 data and an assessment methodology designed by BCBS.

    November 22, 2019 WebPage Regulatory News
    News

    EBA Publishes Roadmap on Risk Reduction Measures Package

    EBA published a set of roadmaps outlining the approach and timelines for delivering the mandates stemming from the Risk Reduction Measures Package adopted by the European Council and European Parliament on May 20, 2019.

    November 21, 2019 WebPage Regulatory News
    News

    EBA Consults on Initial Reporting Requirements for Market Risk

    EBA launched a consultation on the implementing technical standards on supervisory reporting requirements for market risk.

    November 21, 2019 WebPage Regulatory News
    News

    FED Proposes to Extend Initial Compliance Dates Under SCCL Rule

    FED published a proposal to extend, by 18 months, the initial compliance dates for foreign banks subject to the single-counterparty credit limit (SCCL) rule.

    November 20, 2019 WebPage Regulatory News
    News

    CBIRC to Strengthen Supervisory and Policy Support for SME Services

    CBIRC released a notification on strengthening supervision and guidance to enhance the quality and efficiency of financial services for "small and micro-enterprises" (SMEs).

    November 20, 2019 WebPage Regulatory News
    News

    FED Adopts Proposal to Implement Reporting Form for SCCL

    FED adopted a proposal to implement the Single-Counterparty Credit Limits (SCCL) reporting form FR 2590.

    November 20, 2019 WebPage Regulatory News
    News

    APRA Publishes Approach to Regulating and Supervising GCRA Risks

    APRA published an information paper that sets out a more intensive regulatory approach to transform governance, culture, remuneration, and accountability (GCRA) practices across the prudentially regulated financial sector.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Update Rule on Derivative Contracts Exposure Calculation

    US Agencies (FDIC, FED, and OCC) announced a final rule updating the way certain banking organizations are required to measure counterparty credit risk for derivative contracts under their regulatory capital rules.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Finalize Rule to Amend Treatment of HVCRE Exposures

    US Agencies (FDIC, FED, and OCC) finalized a rule to modify the treatment of high volatility commercial real estate (HVCRE) exposures, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

    November 19, 2019 WebPage Regulatory News
    News

    US Agencies Finalize Changes to Rule on Supplementary Leverage Ratio

    US Agencies (FDIC, FED, and OCC) finalized changes to the capital requirement for banking organizations predominantly engaged in custodial activities, as required by the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

    November 19, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4177