Financial crimes compliance

Amidst its continued regulatory focus on money laundering and terrorist financing risks, the SFC seeks to clarify and consolidate guidance for licensed firms.

By Simon Hawkins and Kenneth Y.F. Hui

On 18 September 2020, the Hong Kong Securities and Futures Commission (SFC) published a consultation paper proposing a number of amendments to its Guideline on Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) for SFC-licensed firms (the Guideline).

The consultation paper was issued following a wave of high-profile disciplinary actions taken by Hong Kong regulators for breaches of AML/CFT requirements. The SFC proposes to clarify and consolidate certain AML/CFT requirements by incorporating into the Guideline relevant guidance from the Financial Action Task Force (FATF), including the FATF’s Guidance for a Risk-Based Approach for the Securities Sector (FATF Guidance) and the SFC’s previous circulars on AML/CFT standards and regulatory expectations.