On 15 September 2021, the Securities and Futures Commission (SFC) released its consultation conclusions on the proposed amendments to (i) the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (For Licensed Corporations) and (ii) the Prevention of Money Laundering and Terrorist Financing Guideline issued by the SFC for Associated Entities (collectively, the AML/CFT Guidelines) . The amendments were proposed to align the AML/CFT Guidelines with the Financial Action Task Force standards (in particular, the Guidance for a Risk-based Approach for the Securities Sector).
The revised AML/CFT Guidelines serve to outline the key principles and provide practical guidance to the securities industry on adopting a risk-based approach in combating money laundering and terrorist financing (ML/TF) . Under this risk-based approach, licensed corporations (LCs) are required to identity and assess the ML/TF risks to which they are exposed and implement AML/CFT policies that are appropriate and adequate for the nature, size and complexity of the business of the LCs in order to mitigate the ML/TF risks identified. To elaborate, the key amendments in the revised AML/CFT Guidelines address various aspects, including (i) steps to take and risk indicators to consider when conducting risk assessment; (ii) additional due diligence for cross-border correspondent relationships; (iii) simplified and enhanced measures LCs may apply to lower risk and higher risk customers or business relationships; (iv) red-flag indicators for suspicious transactions and activities; and (v) policies, procedures and measures for handling transactions involving third-party deposits and payments.
The revised AML/CFT Guidelines came into effect on 30 September 2021 (except for the cross-border correspondent relationship requirements, which will become effective on 30 March 2022 after an additional six-month transition period).
For further details, please refer to SFC’s consultation conclusions here.