High-Ranking Position Holders and Real Risks: A New Era in Financial Regulation
In an effort to strengthen financial regulations and combat money laundering and terrorist financing, the Securities Commission has issued new instructions aimed at identifying high-ranking position holders who pose real risks to the financial system.
Key Takeaways
- High-ranking position holders with real risks will be identified through a thorough assessment of their wealth sources.
- Financial institutions must obtain senior management approval before establishing relationships with these individuals.
- Continuous monitoring of transactions is crucial to prevent illicit activities.
- A reporting officer will be appointed to ensure compliance with anti-money laundering and terrorist financing regulations.
The Role of Reporting Officers
- Reporting officers will be responsible for investigating suspicious transactions linked to money laundering or terrorist financing.
- They must have a high functional level, relevant experience, competence, and educational qualifications.
- The Commission has emphasized the importance of confidentiality in reporting procedures.
Internal Regulations
- Financial institutions must establish internal regulations that include policies, procedures, and controls to combat money laundering and terrorist financing.
- These regulations will be subject to regular assessments and audits to ensure compliance.
Record Keeping
- Institutions must maintain records and documents related to their operations for at least five years.
- Files on suspected transactions linked to money laundering or terrorist financing must be kept for a minimum of five years.
Auditor’s Role
- Auditors must commit to ensuring that institutions comply with anti-money laundering and terrorist financing regulations.
- Annual reports will be submitted to the Commission, including the auditor’s opinion on compliance.
Penalties for Non-Compliance
- Institutions found guilty of non-compliance will face penalties under the Securities Law No. 74/2004 or the Anti-Money Laundering Act, whichever is stronger.
The new instructions aim to enhance financial regulations and prevent illicit activities in the sector. By identifying high-risk individuals and implementing robust monitoring systems, the Commission seeks to ensure a safer and more transparent financial environment for all stakeholders.