The new regulation most asset managers do support

Asset managers have welcomed a new regulation which aims to tackle financial crime and money laundering in the industry, according to a survey by Lexis Nexis Risk Solutions.

The new regulation most asset managers do support

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Around 80% of asset managers surveyed in the 2017 edition of the Future Financial Crime Risks Report said new EU anti-money laundering (AML) rules implemented in the UK would help in the fight against financial crime.

Money Laundering Regulations incorporated the EU AML Directive into UK law on Monday.

The new rules require firms to risk assess relationships with customers in order to determine the level of due diligence needed.

The additional checks include screening ‘beneficial owners’ involved in corporate deals.

Mike Harris from Lexis Nexis said the additional compliance work needed over AML would be a “logistical challenge” for smaller and medium-sized firms despite the wide support for it in principle.

He said: “In reality, Britain has always been at the forefront of fighting financial crime – but our research shows the compliance professionals in the financial services sector view the new regulations as further supporting the fight.

“That said, it’s important not to underestimate the sheer scale of the logistical challenge for organisations resulting from this regulatory change, especially for smaller to medium-sized firms.

The recent survey shows a rise in support for the regulation since 2015 when only 17% of the total believed it would significantly reduce money laundering and a third thought it would make no difference.

Harris added: “It is critical that they review the new guidance and revise their processes, controls and risk appetite for on-boarding customers to ensure they maintain compliance.”

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