Challenges presented by AML in the areas of distribution, account opening and client relationships

Vitali Schetle
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Vitali Schetle: Executive Director and Conducting Officer of a Luxembourg domiciled investment fund management company

Journal of Financial Compliance, 2021, vol. 4, issue 4, 363-378

Abstract: Anti-money laundering and counter-terrorist financing (AML/CTF) rules are currently undergoing fundamental changes. A comprehensive legal and regulatory framework has been put in place by lawmakers and national regulators, particularly in recent years. Market participants, however experience challenges when implementing this framework in their business models. These challenges have a range of causes: multifaceted business interests and needs of various market participants, differing levels of (legal) risk appetite to interpret and implement this framework and complex business models of different financial service providers, just to mention a few. The paper presents current challenges and possible solutions when implementing the AML/CTF rules in both distribution and account opening. In distribution, sub-distribution, global distribution, platforms, including settlement platforms, and private placement distribution set-ups are analysed from the AML/CTF perspective in addition to conventional distribution activities. The activity of the global distributor of the investment funds is also focused on. The paper also gives AML/CTF-relevant insights into the activities of UCITS management companies and AIF managers as well as into the delegation framework under Luxembourg law.

Keywords: distribution; sub-distribution; global distribution; platforms; private placement; account opening; UCITS management company; AIFM (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2021
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