Financial Crime World

MONACO MOVES TO STRENGTHEN REGULATIONS AGAINST FINANCIAL CRIME

The government of Monaco has taken a significant step towards enhancing its regulations against financial crime with the submission of a bill to amend law No. 1.338 of September 7, 2007.

Strengthening the Comité de Contrôle des Activités Financières (CCAF)

The bill aims to clarify and strengthen the powers of the CCAF, Monaco’s financial regulator. As part of its bid to join the International Organization of Securities Commissions (IOSCO) as an ordinary member, the bill seeks to enhance the CCAF’s supervisory and investigative capabilities on a global scale.

Key Provisions of the Bill

  • Licensed entities will be required to submit any modifications to their license applications, including changes to shareholding, activities programs, or delegations, for prior authorization from the CCAF.
  • The regulator’s supervision will be extended to banks, with the removal of certain exemptions under article 32 of law No. 1.338. Banks will now be required to notify the CCAF in advance about any financial documentation intended for their clients and the public.
  • New rules will be established for managing conflicts of interest, requiring licensed entities to adopt written procedures and provide prior information to clients when there is a risk of conflict that cannot be avoided.
  • The historical incompatibility between fund management and reception-transmission of orders will be suppressed, allowing Monegasque professionals to engage in both activities without restriction.

Improving Investor Protection

The bill aims to improve investor protection by introducing new obligations for licensed entities operating in Monaco. These include:

  • Registering all services and transactions in compliance with data protection rules.
  • Adopting written procedures for managing conflicts of interest.
  • Providing prior information to clients when there is a risk of conflict that cannot be avoided.

Reform of Market Offenses

The bill also proposes a reform of market offenses, which is expected to provide clarity and certainty for Monegasque professionals who have been facing uncertainty and blockages in their activities.

Next Steps

The Commission has been reviewing the bill since October 6, 2021, and it is expected to be adopted before the end of the year. Once enacted, the regulations are likely to strengthen Monaco’s position as a financial hub and enhance its ability to combat financial crime.