Summary of CySEC's Circular C577
Memo #31-2023
CySEC Circular No: C577
Date: 06/06/2023
Subject: European Banking Authority (‘EBA’) public Consultation Paper on amendments to EBA’s Guidelines on money laundering and terrorist financing risk factors, to include crypto-asset service providers
Purpose: To inform the Regulated Entities that EBA launched a public consultation on amendments to its Guidelines on money laundering and terrorist financing (ML/TF) risk factors.
In Summary:
CySEC has issued the Circular C577 on 06/06/2023 to inform the Cyprus Investment Firms (‘CIFs’), Administrative Service Providers (‘ASPs’), UCITS Management Companies (‘UCITS MC’), Self-Managed UCITS (‘SM UCITS’), Alternative Investment Fund Managers (‘AIFMs’), Self-Managed Alternative Investment Funds (‘SM AIFs’), Self-Managed Alternative Investment Funds with Limited Number of Persons (‘SM AIFLNP’), Companies with sole purpose the management of AIFLNPs, Small Alternative Investment Fund Managers (‘Small AIFMs’) and the Crypto Asset Service Providers, that the European Banking Authority (‘EBA’) launched on 31/05/2023 a public consultation on amendments to its Guidelines on money laundering and terrorist financing (ML/TF) risk factors (‘Guidelines’).
The proposed changes extend the scope of these Guidelines to crypto-asset service providers (‘CASPs’).
The EBA is proposing to amend its ML/TF risk factors guidelines to set common, regulatory expectations of the steps CASPs should take to identify and mitigate ML/TF risks effectively.
The amendments introduce new sector-specific guidance for CASPs. This new sector-specific guidance for CASPs highlights factors that may indicate the CASP’s exposure to the higher or lower ML/TF risk.
Furthermore, the amendments to the Guidelines include guidance to other credit and financial institutions on risks to consider when engaging in a business relationship with a CASP or when they are otherwise exposed to crypto assets.
CySEC informs that Regulated Entities may respond to the EBA's public consultation paper by submitting their comments through the EBA's consultation page. The deadline for the submission of comments is 31/08/2023.
CySEC notes that it encourages the Regulated Entities to respond to the EBA's public consultation paper.
The EBA's consultation page can be found on the following link: https://www.eba.europa.eu/eba-consults-amendments-guidelines-money-laundering-and-terrorist-financing-risk-factors-include.
The EBA’s public consultation paper can be found on the following link: https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Consultations/2023/Consultation%20on%20revised%20Guidelines%20on%20money%20laundering%20and%20terrorist%20financing%20%28ML-TF%29%20risk%20factors/1055913/Consultation%20paper%20on%20amending%20Guidelines%20on%20ML%20FT%20risk%20factors.pdf.
The EBA’s ML/TF Risk Factors Guidelines can be found on the following link: https://www.eba.europa.eu/sites/default/documents/files/document_library/Publications/Guidelines/2021/963637/Final%20Report%20on%20Guidelines%20on%20revised%20ML%20TF%20Risk%20Factors.pdf.
Read the CySEC Circular C577
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