ASIFMA KYC/AML Best Practices Guide

On May 23, ASIFMA shared its updated KYC/AML best practices guide.

  • ASIFMA issued updated Best practices for KYC/AML (of May 1, 2023) which proposes a set of best practices to harmonize and standardize the application of certain key areas.
  • These areas are know-your-customer (KYC) as well as anti-money laundering (AML) requirements in Asia; best practices are based on input and industry feedback from a focused working group of ASIFMA members from both the buy as well as the sell side.
  • Follows HKMA Jan. 2023 consult re guide on AML/CFT for banking firms, see #160626.
  • Also follows SIN MAS Oct. 2021 proposed framework for AML/CFT platform, #117595.
  • Guidance Overview
  • The objective of this paper is to help industry participants gain an understanding of current best practices, drive harmonization and standardization in KYC/AML in APAC.
  • Best practices have been drafted as generally as possible to be jurisdiction-neutral.
  • However, ASIFMA explained that reference was largely drawn from industry consensus of best practices currently applied by members in Hong Kong as well as Singapore.
  • Guided that effective AML measures in banking sector are essential to ensure financial institutions can perform gatekeeper roles, are able to conduct robust, risk-based KYC.
  • Specifically, so that they can manage money-laundering and terrorism-financing risks.
  • Topics Covered
  • Topics covered in this guidance include overall risk assessment; client due diligence (CDD) measures - identification of customer; CDD measures - verification of customer.
  • CDD - establishing business relationship; CDD - person purporting to or appointed to act on behalf of the customer; as well as cross-border correspondent relationships.
  • Third party deposits, payments; when CDD measures must be carried out; simplified customer DD; duty to continuously monitor business relationships; risk-based approach; carrying out CDD measures via intermediaries / 3rd parties; documentation.

Regulators ASIFMA
Entity Types B/D; Corp; IA; Inv Co
Reference PR 5/23/2023; Gd 5/1/2023
Functions AML; Compliance; Product Administration; Risk
Countries Asia Regional; Hong Kong; Singapore; Cross-Border
Category Trade Association
State
Products Corporate; Deposits; Fund Mgt; Payments; Securities
Regions AP
Rule Type Guidance
Rule Date 5/23/2023
Effective Date 5/23/2023
Rule Id 173584
Linked to Rule :160626
Reg. Last Update 5/23/2023
Report Section AML & Enforcement

Last substantive update on 05/25/2023