Greg Kilminster
Head of Product - Content
UK Government responds to SARS regime review
The UK government has published its response to the Law Commission’s review of the Suspicious Activity Reports (SARs) regime, which was initiated in 2017 to assess certain aspects of the anti-money laundering and counter-terrorism financing regimes. The review examined the feasibility of reforming the voluntary disclosures system, known as the “consent regime,” within the existing legislative framework.
The Law Commission’s final report, issued in 2019, contained 19 legislative and non-legislative recommendations addressing the requirements and practical application of Part 7 of the Proceeds of Crime Act 2002 and the counter-terrorism financing regime in Part 3 of the Terrorism Act 2000.
The government’s response is largely supportive of retaining the regime, with reviews being conducted regularly through feedback and engagement. The response also suggests that guidance should be provided by sectoral regulators rather than the Secretary of State in the form of statutory guidance.
Additionally, the government’s response provides detailed views on specific aspects of the rules, including exemptions from substantive money laundering offences, the use of suspicion as a threshold for information sharing, and data exploitation.
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ISDA releases report on climate risk scenario analysis for the trading book
The International Swaps and Derivatives Association (ISDA) has released a report outlining methodologies for conducting climate risk scenario analysis for the trading book (Phase 2).
The report builds upon the conceptual framework published by ISDA in 2023 (Phase 1), which identified the key components required to develop climate risk scenarios for the trading book and is a first step towards establishing a standard for measuring climate-related risks in this context.
Going forward, the ISDA working group plans to expand the scenarios to include more regions and sectors, which will help firms enhance their climate scenario analysis capabilities and align with regulatory expectations.
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EBA issues report on application of ESAs guidelines on prudential assessment of acquisition of qualifying holdings
The European Banking Authority (EBA) has published a follow-up to the 2021 peer review report on the competent authorities’ (CAs) application of the Joint ESAs Guidelines on the prudential assessment of the acquisition of qualifying holdings.
The 2021 report suggested improvements to the ESAs guidelines GL in various areas, including enhancing the guidance on the assessment of ML/TF risk, large and complex acquisitions, the principle of proportionality, and the content of documents and information to be provided with an application.
In the follow-up, the EBA Peer Review Committee (PRC) concluded that the ESAs GL are generally largely or fully applied by CAs but also identified areas where CAs showed deficiencies in their practices.
The initial EBA analysis has been taken into account by the legislators in the review of the CRD (CRDVI), and the EBA will wait for the completion of the legislative negotiations and of the conferred mandates prior to assessing any further need to update the ESAs GL.
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Former director of Reiwa- Capital pleads guilty to dishonest conduct
Russell Sandiford, the former director of Reiwa-Capital, has pleaded guilty to two counts of dishonest conduct in relation to a financial product following an ASIC investigation.
Between January 2020 and June 2022, he obtained $440,909.71 from 74 clients by promising to invest their money in trading activity. However, he did not use the money as agreed, and it was not used for trading as represented.
If found guilty, Sandiford faces a minimum sentence of 15 years imprisonment or a fine of three times the total value of the benefits obtained, or both (the greater of $945,000). The matter is currently before the Sydney District Court, and a sentencing hearing date will be set on 15 March 2024.
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