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Adviser’s Privilege Exemptions Scrutinized in New Regulations
A recent regulatory overhaul has introduced several exemptions to the adviser’s privilege, allowing for greater scrutiny of sensitive information. The new regulations, aimed at combating money laundering and terrorist financing, have sparked debate among legal professionals.
Exemptions to Adviser’s Privilege
According to the revised guidelines, a professional legal adviser is exempt from the adviser’s privilege if the information or matter is communicated or given by:
- A client or their representative in connection with legal advice provided
- Another person or their representative seeking legal advice from the adviser
- In connection with legal proceedings or contemplated legal proceedings
However, this exemption does not apply when the information or matter is communicated with a view to furthering a criminal purpose known to the professional legal adviser.
Auditor Review of Compliance Program
The regulations also introduce new requirements for financial institutions and listed businesses to review their compliance programs. According to the guidelines, these entities must:
- Engage internal and external auditors to evaluate compliance with relevant legislation and guidelines
- Ensure that policies, procedures, and systems are in line with the requirements of the regulations
In cases where a financial institution or listed business does not engage an external or internal auditor, the Supervisory Authority will assign a competent professional to perform the review. The cost of these services will be borne by the financial institution or listed business.
Customer Due Diligence Requirements
The regulations also introduce new customer due diligence requirements for financial institutions and listed businesses. These entities are required to:
- Conduct due diligence in accordance with specific categories of risk established under regulation 7
- Rely on third-party financial institutions or listed businesses to perform elements of customer due diligence, but the ultimate responsibility remains with the relying institution
As the regulations come into effect, lawyers and financial professionals are closely scrutinizing the exemptions and requirements to ensure compliance with anti-money laundering and terrorist financing regulations.