SFC to implement new guidelines on anti-money laundering and counter-terrorist financing

In a set of consultation conclusions released today, the Securities and Futures Commission (SFC) announced the gazettal of a new set of guidelines on anti-money laundering (AML) and counter-terrorist financing (CFT) (Note 1).

The gazettal of the new guidelines is in line with the SFC’s proposals (Note 2) to provide guidance to the industry relating to, among others, the operation of the provisions of Schedule 2 to the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (AMLO) which shall come into effect on 1 April 2012.

The guidelines will assist licensed corporations and associated entities (Note 3) in designing and implementing appropriate and effective policies, procedures and controls so as to comply with the AMLO requirements and/or other applicable AML/CFT legislation and regulatory requirements.

The SFC received a total of 25 submissions from industry practitioners, trade associations and professional bodies in response to the proposed guidelines. Respondents generally found the guidelines helpful, and some sought clarification on specific matters and adaptation of certain requirements to facilitate compliance. The SFC has amended the guidelines in a number of areas to address comments whilst ensuring that they remain in line with international AML/CFT standards. Details of the submissions and the SFC’s responses to the comments are contained in the consultation conclusions.

To coincide with the commencement of the AMLO, the guidelines will take effect on 1 April 2012 to replace the existing Prevention on Money Laundering and Terrorist Financing Guidance Note published by the SFC.

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Notes:
1. The set of guidelines consists of: (1) Guideline on Anti-Money Laundering and Counter-Terrorist Financing and (2) Prevention of Money Laundering and Terrorist Financing Guideline issued by the SFC for Associated Entities.
2. On 30 September 2011, the SFC launched a consultation to invite comments on the “Consultation Paper on (1) the Proposed Guideline on Anti-Money Laundering and Counter-Terrorist Financing and (2) the Proposed Prevention of Money Laundering and Terrorist Financing Guideline Issued by the SFC for Associated Entities”. The consultation ended on 18 November 2011.
3. “Associated entity” refers to a company that is in a controlling entity relationship with an intermediary and receives or holds in Hong Kong client assets of the intermediary.