Circular to Licensed Corporations and Associated Entities
Anti-Money Laundering / Counter-Terrorist Financing
Amendments to Anti-Money Laundering and Counter-Terrorist Financing Guidelines
The Securities and Futures Commission (“SFC”) published in the Gazette today (G.N. 1227 of
2018) Note 1 two revised guidelines, namely:
- Guideline on Anti-Money Laundering and Counter-Terrorist Financing (“the Guideline”); and
- Prevention of Money Laundering and Terrorist Financing Guideline issued by the SFC for Associated Entities (“the Guideline for AEs”),
to incorporate provisions which reflect the relevant amendments in the recently enacted Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) (Amendment) Ordinance 2018 (“the Amendment Ordinance”) Note 2 .
These provisions are mainly related to the followings:
(a) aligning the threshold of defining beneficial ownership from the current “not less than 10%” to “more than 25%”, having regard to the prevailing Financial Action Task Force (“FATF”) standard and international practice;
(b) introducing flexibility to measures permitted to be taken for verifying a customer’s identity, in the light of technological development in the methods used by financial institutions for obtaining information relating to customers;
(c) permitting financial institutions to rely on foreign financial institutions within the same financial group as intermediaries to carry out customer due diligence measures;
(d) reflecting the current criteria relating to wire transfers Note 3 in the FATF recommendations by requiring the recording of basic information about a recipient and, where applicable, an intermediary institution involved in a transaction; and
(e) changing the record-keeping period from “six years” to “at least five years”.
These revised guidelines will come into effect on 1 March 2018. Marked-up amendments to the Guideline and the Guideline for AEs are set out in Appendix 1 and Appendix 2 to this circular respectively.
Licensed corporations and associated entities should review their existing policies and procedures in light of the changes in the revised guidelines and take any necessary steps to ensure continued compliance with all applicable requirements of these guidelines.
Should you have any queries regarding the contents of this circular, please contact Ms Kiki Wong on 2231 1569.
Intermediaries Supervision Department
Securities and Futures Commission