March 2, 2021

Volume XI, Number 61

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March 02, 2021

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March 01, 2021

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ESAs Publish Consultation Paper Relating to MLD4

On November 8, the Joint Committee of the European Supervisory Authorities (ESAs) published a consultation paper on draft joint guidelines on cooperation and information exchange between national competent authorities (NCAs) supervision credit and financial institutions for the purposes of the Fourth Money Laundering Directive (MLD4)

MLD4 includes a high-level requirement for EU NCAs to cooperate with each other regarding the supervision of anti-money laundering/ counter-terrorist financing (AML/CTF), but it does not provide details as to how this cooperation should be fulfilled. The Fifth Money Laundering Directive (MLD5) has subsequently amended MLD4, so that the legal basis for the cooperation and exchange of information between NCAs has also been clarified and specifies that member states must not prohibit or unreasonably restrict the exchange of AML/CTF information or cooperation between NCAs. However, again as with MLD4, MLD5 does not set forth how such requirements should be achieved.

The ESAs have therefore proposed improved supervisory cooperation and information exchange through AML/CTF colleges, as well as guidelines clarifying how to achieve such requirements. The guidelines (referred to as The AML Colleges Guidelines):

  1. Set forth rules governing the establishment and operation of the AML/CTF colleges. They provide that all NCAs should identify firms that require an AML/CTF college to be established—and such colleges will provide a forum for cooperation and information exchange to those NCAs responsible for supervising the same firm in different jurisdictions;

  2. Define the process for bilateral exchanges of information where there are only two NCAs supervising a firm.

  3. Emphasize the need for AML/CTF supervisors and prudential supervisors to exchange information.

The ESAs will hold a public hearing on the draft guidelines at the European Banking Authority’s London offices on December 18. The consultation period closes on February 8, 2019.

The consultation paper is available here.

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©2020 Katten Muchin Rosenman LLPNational Law Review, Volume VIII, Number 313
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About this Author

John Ahern, Financial Attorney, London, Katten Law Firm
Partner

John Ahern, partner at Katten Muchin Rosenman UK LLP and head of the London Financial Services group, focuses his practice on banking, financial services, UK and European financial markets, and related regulations. His background in private practice and as in-house counsel at a global investment bank provides him with perspective on the unique regulatory issues facing the wholesale and private banking sectors. John advises multilateral trading facilities, broker-dealers and banks on trading, clearing and settlement as well as custody of securities—both physical and...

+44 (0) 20 7770 5253
Carolyn H. Jackson, International Attorney, Katten Muchin law firm
Partner

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws...

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London
Partner

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...

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