Financial Services Newsletter : Financial regulatory

Written on 26 Feb 2020

DNB revises money laundering guidelines

On 18 December 2019, the Dutch Central Bank (DNB) published revised guidelines on the Money Laundering and Terrorist Financing (Prevention) Act and the Sanctions Act (the Guidelines).

The Guidelines provide a framework for institutions (including investment firms, electronic money institutions and financial services providers) on how to comply with the Dutch Money Laundering and Terrorist Financing (Prevention) Act (Wwft) and the Sanctions Act (Sw).

The Guidelines replace the previous guidelines on the Wwft and the Sw from April 2015 as a result of the act implementing Directive (EU) 2015/849, also known as the Fourth Anti-Money Laundering Directive, which entered into force in the Netherlands on 25 July 2018.

The Guidelines comprise information for institutions on the following themes: organising the business procedures; setting up a systematic integrity risk analysis; conducting customer due diligence; transaction monitoring; and reporting about unusual transactions, sanction regulations and recording of information.

The guidelines (presently in Dutch only although DNB is expected to publish an English version) next revision is planned in the first half of 2020 and in connection with the entering into force of the act that implements Directive (EU) 2018/843 (see next story).

Dutch government delays enacting money laundering directive

On 19 December, the Dutch government announced that the act that implements the revised anti-money laundering and terrorist financing directive would not come into force on 10 January 2020.

The Dutch government announced that the act implementing Directive (EU) 2018/843 (5ALMD) would not enter into force on the original target date. Instead, the act that implements 5AMLD has been under debate in the Dutch Senate.

This means that the requirements under the act implementing the 5AMLD do not apply in the Netherlands as from 10 January 2020.

On the basis of the act implementing the 5AMLD there is a registration regime with DNB for anyone providing services for the exchange of virtual currency and fiat currency – for instance, platforms or exchanges bringing together the buying and selling intentions of third parties with respect to crypto currencies. The regime also includes anyone offering wallets for holding, saving and transferring virtual currency on behalf of clients in or from the Netherlands on a professional or a commercial basis. The act that implements the 5AMLD also provides for further restrictions to the use of anonymous prepaid cards.

It is envisaged that the 5AMLD is implemented in the Netherlands in spring 2020. News and updates as regards the entering into force of the act implementing the 5AMLD can be found here.

Consultation opened by Europe’s banking authorities on institutional risk

On 19 December, the European Banking Authority (EBA) launched a public consultation on its draft Regulatory Technical Standards (RTS) that looks at the criteria for credit institutions and investment firms to identify risk takers.

The EBA public consultation on its draft RTS is looking at the criteria required to identify all categories of staff “whose professional activities have a material impact on the institutions’ risk profile” and are deemed as “risk takers“. On the basis of the revised Capital Requirements Directive (CRD V), credit institutions and investment firms must comply with rules in relation to remuneration policies and variable remuneration of risk takers.

Risk takers will be identified based on the criteria laid down in Article 92(3) of the CRD V – which includes members of the management body, senior management and staff members with managerial responsibility over the institution’s risk control functions or material business units – and those specified within the draft RTS.

Members of staff are identified as having a material impact on the institution’s risk profile as soon as they meet at least one of the criteria, whether the criteria foreseen under CRD V, the revised qualitative or quantitative criteria in the draft RTS or, where necessary – and because of the particularities of a regulated firm’s business model – additional internal criteria. These measures aim to ensure that all risk takers are identified. The revised qualitative criteria identify in more detail staff with managerial responsibilities and with decision-making powers who have a material impact on the institutions risk profile.

The EBA’s public consultation of the draft RTS ran until 19 February 2020. After the finalisation of the draft RTS, it is planned to be submitted in June 2020 to the European Commission.