Financial Crime World

VP Bank in Liechtenstein: Navigating Complex Financial Compliance Regulations

VP Bank in Liechtenstein, a joint-stock corporation and the head office of VP Bank Group, is subject to stringent financial compliance regulations. This section outlines the regulations VP Bank Ltd must adhere to and the bodies overseeing their compliance.

Oversight Bodies and Regulations

The Financial Market Authority Liechtenstein (FMA) is the primary oversight body for VP Bank’s activities. As a listed company on the SIX Swiss Exchange, its bearer shares are also subject to rules and regulations from this exchange.

Banking Act and Banking Ordinance

The Liechtenstein financial services sector is primarily governed by the Act of 21 October 1992 on Banks and Securities Firms (Banking Act, BankA) and the Ordinance of 22 February 1994 on Banks and Securities Firms (Banking Ordinance, BankO). Some key provisions of these legislations are outlined below:

  • Compliance reporting: Mandatory reports by banks to the FMA
  • Liaison with boards and management: Direct contact with the bank’s top leadership
  • External auditing: Relying on auditing reports prepared by external auditors

European Union (EU) Regulations

As an EEA member state, Liechtenstein has implemented several EU Anti-Money Laundering Directives and regulations:

  1. 4th EU Anti-Money Laundering Directive (AMLD4): Outlines due diligence obligations
  2. 5th EU Anti-Money Laundering Directive (AMLD5): Enhances customer due diligence and transparency
  3. Regulation (EU) 2015/847: Establishes rules for information accompanying fund transfers

These regulations, along with the Criminal Code of Liechtenstein, serve as the legal basis for entities in the financial services sector.

Relevant Laws and Ordinances

VP Bank Ltd must adhere to several other regulations. Some of the most significant ones are:

  • Regulations on payment services, settlement finality, alternative investment fund managers, investment undertakings, and disclosures

Significant Developments

Payment Accounts Law (PAL)

Implementing the EU’s Payment Accounts Directive, the Payment Accounts Law (PAL) encompasses the right to a basic account, transparency of fees, and provision of a payment account exchange service by banks.

EEA Financial Services Sustainability Implementing Act (EEA FSSIA)

Intended to implement the EU’s sustainability-related disclosures in the financial services sector, the EEA Financial Services Sustainability Implementing Act (EEA FSSIA) was implemented early to ensure equality of competition with EU member states.

Ongoing Regulatory Transformation

EU Banking Package

The EU banking package contains several regulations focusing on minimizing risks within the European banking sector:

  1. CRD V: Adopts international regulatory reforms
  2. CRR II: Establishes new capital requirements
  3. BRRD II: Enhances crisis management and resolution frameworks

Basel IV

In the coming years, Basel IV will bring about major changes in capital requirements and medium- to long-term liquidity risk.

Commitment to Regulatory Compliance

Throughout this period of regulatory transformation, VP Bank Ltd remains committed to maintaining compliance with all applicable regulations to protect its reputation and ensure the trust of its clients.