Luxembourg's financial regulator, the Commission de Surveillance du Secteur Financier (CSSF), has announced that the Financial Action Task Force (FATF) has adopted its revised risk-based approach guidance for the securities sector on 26 October 2018.
The risk-based approach is central to the effective implementation of the 2012 FATF Recommendations, which is equally reflected in the 4th European AML Directive implemented through the Law of 12 November 2004 on the fight against money laundering and terrorist financing, as amended.
The FATF guidance aims to support the design and implementation of the risk-based approach for a wide range of securities products and services, including the provision of investment funds. It provides specific guidance and examples inter alia of risk factors and indicators of suspicions to be considered by securities providers and their supervisors.
The guidance also stresses that when determining the type and extent of CDD to apply, a securities provider should understand whether its customer is acting on its own behalf or as an intermediary on behalf of its underlying customers, assess the risk of the intermediary and apply the required level of due diligence on the intermediary.
The FATF guidance complements the existing Luxembourg legal and regulatory AML/CFT framework, inter alia Article 3 of the CSSF Regulation 12-02, CSSF Circulars 18/698 and 17/661, and has thus to be read in conjunction with the latter.
See http://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/RBA-Securities-Sector.pdf
