SFC’s consultation conclusions on proposed amendments to two guidelines on combating money laundering and terrorist financing

On 15 September 2021, the Securities and Futures Commission  (SFC)  released its consultation conclusions on the proposed amendments to  (i)  the Guideline on Anti-Money Laundering and Counter-Financing of Terrorism  (For Licensed Corporations)  and  (ii)  the Prevention of Money Laundering and Terrorist Financing Guideline issued by the SFC for Associated Entities  (collectively, the AML/CFT Guidelines) . The amendments were proposed to align the AML/CFT Guidelines with the Financial Action Task Force standards (in particular, the Guidance for a Risk-based Approach for the Securities Sector).

The revised AML/CFT Guidelines serve to outline the key principles and provide practical guidance to the securities industry on adopting a risk-based approach in combating money laundering and terrorist financing  (ML/TF) . Under this risk-based approach, licensed corporations  (LCs)  are required to identity and assess the ML/TF risks to which they are exposed and implement AML/CFT policies that are appropriate and adequate for the nature, size and complexity of the business of the LCs in order to mitigate the ML/TF risks identified. To elaborate, the key amendments in the revised AML/CFT Guidelines address various aspects, including  (i)  steps to take and risk indicators to consider when conducting risk assessment;  (ii)  additional due diligence for cross-border correspondent relationships;  (iii)  simplified and enhanced measures LCs may apply to lower risk and higher risk customers or business relationships;  (iv)  red-flag indicators for suspicious transactions and activities; and  (v)  policies, procedures and measures for handling transactions involving third-party deposits and payments.

The revised AML/CFT Guidelines came into effect on 30 September 2021  (except for the cross-border correspondent relationship requirements, which will become effective on 30 March 2022 after an additional six-month transition period).


For further details, please refer to SFC’s consultation conclusions here.

15 October 2021
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