Featured Product

    HMT Publishes Review of AML/CFT Regulatory Regime

    June 24, 2022

    Her Majesty's Treasury (HMT) published a forward-looking review of the anti-money laundering and countering the financing of terrorism (AML/CFT) regime in UK, along with the post-implementation reviews on the Money Laundering Regulations 2017 (MLRs) and the Office for Professional Body AML Supervision Regulations (OPBAS), to fulfil its statutory obligations.

    The forward-looking review of the AML/CFT regime focused on improving the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), ensuring the application of effective risk-based controls across the regulated sector and developing a world-class AML supervisory regime. The review has been structured around three key themes:

    • Systemic Effectiveness. Ensuring that as the government works to reform and improve the UK’s regime, there is an agreed definition of what effectiveness looks like and some proposals on how we can start to measure this with more precision
    • Regulatory Effectiveness. Ensuring that the firms and individuals on the front line of the UK’s fight against illicit finance are well-equipped, with a strong risk understanding and capability to implement effective risk-based controls within their business as well as the scope to target that activity at areas of highest risk
    • Supervisory Effectiveness. Continuing reform of the supervision regime and building on the improvements made in recent years while assessing the rationale for further structural change to the regime

    The post-implementation review of the MLRs draws on the methodology of "Immediate Outcomes" established by the Financial Action Task Force (FATF), which is the international standard-setter for AML. The review assessed the extent to which the MLRs had been successful in meeting their stated policy intent, which was to transpose 4MLD and 5MLD (Anti Money Laundering Directive), making the UK economy a hostile environment for illicit finance while minimizing unnecessary burdens on legitimate businesses. The post-implementation review of the OPBAS regulations considered the implementation and effectiveness of the regulations and the activity they require of supervisors. The review measured the progress of OPBAS and effectiveness of the OPBAS regulations. The report focusses on the areas that the government considers are the most important for improving effectiveness. This includes large overarching areas (such as the risk-based approach and the objectives of the MLRs) and much more specific areas (such as the gatekeeping test or guidance drafting process). The key areas of the government focus for the next phase of the development of the MLRs are as follows:

    • Supervision. The government is clear that reform is needed, but the best scale and type of reform to improve effectiveness and solve the problems that have been identified is not yet clear. The government has laid out a shortlist and will consult further on options for reform.
    • Specific regulations. The government is confident that most of the requirements and provisions currently in the MLRs are the right ones. The government is committed to continuing to align with and champion the FATF’s recommendations.
    • Objectives. The government will set out clear new objectives to the MLRs, in line with the FATF’s methodology and embedding a renewed definition of effectiveness.
    • Risks. The government will use existing processes including the NRA to consider emerging ML/TF risks and consider sectors for addition to the MLRs. The government will not set out National Priorities at this time but will instead focus on a system-wide effort to improve risk understanding and information sharing around risks and threats.
    • Wider levers for effectiveness. The government continues to engage with stakeholders to deepen understanding of the application of new technologies, the challenges faced by small or newly regulated firms, the incentives of the current system, and the supervisory approach to the risk-based approach.
    • Guidance. The government will not overhaul the current guidance arrangements but will seek to make the existing guidance more streamlined, consistent, and clear; it will consider requests for further guidance on a case-by-case basis.


    Related Links


    Keywords: Europe, UK, Banking, AML CFT, Money Laundering, OPBAS, MLR, Systemic Risk, FATF, ML TF Risk, AMLD, Regtech, Operational Risk, Basel, HM Treasury

    Featured Experts
    Related Articles

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8424