Here is the converted article in markdown format:

Monaco’s Banking Sector: A Regulatory Overview

=====================================================

In a bid to ensure stability and transparency in its financial system, Monaco has put in place a robust regulatory framework that governs the country’s banking sector. The Comité de Contrôle des Activités Financières (CCAF), which is responsible for supervising credit institutions and other financial entities, plays a crucial role in this regard.

Deposit Insurance

The Monegasque government does not provide deposit insurance, but banks affiliated with the French Deposit Guarantee and Resolution Fund (FGDR) since 1999 are eligible for coverage. The FGDR guarantees deposits up to €100,000 per depositor and securities up to €70,000 per investor.

Transactions between Affiliates

There are no specific limitations on transactions between a bank and its affiliates in Monaco, except for general corporate law rules applicable to Monegasque corporations. Banks can engage in ancillary activities that do not create conflicts of interest or harm their reputation.

Regulatory Challenges

One of the primary regulatory challenges facing the banking industry in Monaco is implementing and complying with the country’s Anti-Money Laundering (AML) legislation, which has undergone several amendments in recent years to align with European Union directives. The latest reform aims to strengthen AML obligations and criminal provisions.

Consumer Protection

While there are no specific consumer protection rules applicable to banks under Monegasque law, case law requires credit institutions to provide stronger information and advice to non-professional clients. Cross-border activities may also trigger application of foreign consumer public policy rules.

Future Changes

The signing of an association agreement between Monaco and the European Union is expected to have significant consequences on the country’s banking sector, potentially opening up new competitors in the market. A draft law aimed at exempting certain banking services offered to foreign consumers from consumer protection rules is currently under examination.

Date of Information Accurate

This information is accurate as of February 15, 2021.