June 2, 2020

June 02, 2020

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June 01, 2020

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HMT Responds to MLD5 Consultation

On January 23, HM Treasury (HMT) published its response (the Response) to the Consultation on the Transposition into UK law of the EU’s Fifth Money Laundering Directive (the Consultation). The Consultation closed in June 2019.

The Fifth Money Laundering Directive (MLD5) is primarily focused on expanding the EU’s anti-money laundering (AML) regime into new areas such as crypto-assets and art dealers. It became operational in the UK on January 10 (for more information, please see the January 10 edition of Corporate & Financial Weekly Digest).

The purpose of the Response is to address comments and issues raised by respondents to the Consultation. In general, the respondents agreed with the Government’s proposals, but wanted to ensure that definitions are clear and specific, that disclosure requirements do not undermine data security, and that, as the AML regime is expanded to encompass lay trustees, art dealers and letting agents, these people are fully aware of their new responsibilities.

HMT also used the Response to emphasize the ongoing application of the obligations in MLD5 now that the UK has left the EU but for the remainder of 2020 remains subject to EU law (for more information on the ‘implementation period,’ please see the January 24 edition of Corporate & Financial Weekly Digest). While in the Response there is no discussion of what will happen after the end of the implementation period, in the Response HMT noted that:

“As a leading and founding member of the [Financial Action Task Force], the UK will remain at the forefront of international standards and respond to new threats… The government is committed to building on the progress already made in fighting economic crime and maintaining strong protections and standards against money laundering and terrorist financing.”

The Response is available here.

For more information on the work done by the Financial Action Task Force, or FATF, please see the July 12, 2019 edition of Corporate & Financial Weekly Digest.

©2020 Katten Muchin Rosenman LLP


About this Author

John Ahern, Financial Attorney, London, Katten Law Firm

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

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 and regulations. 

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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

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...