Monaco Regulatory Compliance Checklist: A Step Closer to International Standards
The Principality of Monaco is set to further regulate its financial activities with a proposed bill submitted to the National Council in April 2021. The bill aims to amend Law No. 1.338 and strengthen the powers of the Committee of Control and Prevention of Money Laundering (CCAF) on an international level.
Clarifying Regulatory Powers
The bill clarifies and strengthens the regulatory powers of the CCAF, particularly with regards to supervision and investigation. This includes:
- Prior authorization for license modifications, including changes to shareholding, activities program, delegation, and more
- Enhanced reporting requirements for banks regarding financial documentation intended for clients and the public
New Obligations for Financial Actors
The bill introduces new obligations for financial actors in Monaco, including:
- Removing exemptions for banks, requiring them to communicate financial documentation to the CCAF in advance
- Allowing financial actors to offer financial products or services to non-professional individuals in Monaco only after prior authorization from the CCAF
Investor Protection and Conflict of Interest Management
The bill aims to improve investor protection by establishing new rules for managing conflicts of interest. Licensed entities must:
- Adopt written procedures for managing conflicts
- Provide prior information to clients when a conflict cannot be avoided
Additionally, the bill proposes to eliminate historical incompatibilities between Monegasque fund management and reception-transmission of orders.
Data Protection and Registration
The bill requires all services and transactions to be registered in compliance with data protection rules. This new obligation aims to improve supervision of licensed entities by the CCAF.
Market Offenses Reforms
The bill proposes reforms to market offenses, which could provide clarity on regulatory requirements for Monegasque professionals if adopted.
Timeline
- The bill was submitted to the National Council in April 2021
- It has been under review since October 2021 and may be adopted before the end of the year
By implementing these changes, Monaco is taking a significant step towards international standards and improving its regulatory framework.