Crescent Compliance Solutions (Pty) Ltd

The Financial Sector Conduct Authority (FSCA) has approved amendments to the rules of Strate (Pty) Ltd under section 71(3)(c) of the Financial Markets Act, 2012. These amendments are now available on both the FSCA and Strate official websites. Related links: Approved Amendments to the rules of Strate (18 October 2024) - https://lnkd.in/e2Sc6c2X

Regulation (EU) 2015/847, implemented in 2015, aligns with FATF’s Recommendation 16, mandating that payment service providers (PSPs) ensure funds transfers include specific payer and payee information - the “travel rule.” This measure aims to curb financial crime, particularly terrorism financing, by enabling authorities to 'detect the transfer of funds lacking this information, and to determine whether to execute, reject or suspend such transfers'. Following FATF's 2019 extension of Recommendation 16 to virtual asset service providers, the EU further updated its legislation with Regulation (EU) 2023/1113, extending AML/CFT requirements to crypto-asset service providers (CASPs). This update requires CASPs to uphold AML/CFT standards equivalent to those for other financial institutions. Related link: Travel Rule Guidelines - https://lnkd.in/eUkmzgQT

Financial inclusion is the provision of accessible financial services to underserved populations, facilitating their participation in the economy. By integrating financial inclusion into its framework, the FATF aims to enhance financial security while empowering economically marginalized individuals and communities. This comprehensive approach seeks to create a safer financial system that works for everyone.

FATF realises that a one-size-fits-all approach doesn't benefit all of its members and has adjusted its listing process. "The changes made by the FATF will ensure the listing process better targets the countries that pose the greatest risk to the international financial system and contributes to more adequate support to low-capacity countries."

Japan's progress in strengthening measures to tackle money laundering and terrorist financing.

The FATF's updated listing criteria addressed in its 'Procedures for the FATF AML/CFT/CPT Mutual Evaluations, follow up and ICRG', are designed to reduce pressure on least developed countries, shifting focus to nations that present greater risks to the global financial system. These revisions shift priority towards FATF members, high-income nations and jurisdictions with financial sectors exceeding $10 billion in assets, thus reducing scrutiny on low-capacity countries unless they present significant risks. Least developed countries may also receive extended observation periods to address deficiencies. These measures will reduce the number of low-capacity nations being greylisted, enabling a more effective targeting of high-risk countries and better allocation of global AML/CFT resources. Related links: FATF changes its grey listing criteria to further focus on risk - https://lnkd.in/ehJAauXF Procedures for the FATF ALM/CFT/CPT Mutual Evaluations, follow up and ICRG - https://lnkd.in/etQnFzEA

The FATF Methodology 2023 emphasises that a country's supervisory regime must go beyond mere compliance with AML/CTF requirements to effectively mitigate money laundering (ML) and terrorist financing (TF) risks. In its AML/CFT Supervision Consultation Draft, FATF has identified 10 Key Enablers (KE) and 40 Critical Takeaways (CT) that aim to enhance supervisory effectiveness, prompting policymakers and supervisors to engage in discussions for improvement. One area of significance that the paper focuses on are countries placed on the FATF's Greylist face considerable obligations, including developing a comprehensive action plan to address identified weaknesses. This process is lengthy and prioritises FATF compliance, often at the expense of other important initiatives. The economic ramifications for Greylisted countries can be profound, affecting cross-border financial activities and increasing compliance costs, particularly in correspondent banking. Critics argue that Greylisting disproportionately impacts nations in the "global south," which often have fewer resources to respond effectively. FATF acknowledges the unintended consequences of Greylisting, which can elevate the perceived ML/TF risks of listed countries within third-party assessments. This results in increased scrutiny and control measures for financial transactions, sometimes restricting access to foreign correspondent banking despite positive ratings in specific areas. FATF is aware of these disparities and is considering adjustments to its approach to ensure fairer treatment of all countries. The paper reflected on the importance that jurisdictions must possess capable, independent and efficient judicial systems, which are essential for upholding the rule of law. Such systems enable the imposition of effective, proportionate and deterrent sanctions against money laundering and terrorist financing (ML/TF), thereby safeguarding financial integrity, peace and security. Related link: AML/CFT Supervision Consultation Draft - https://lnkd.in/eGbtAThZ

The FSCA has announced amendments to the JSE Listing Requirements under the Rejuvenation Project, effective 30 days after their publication on 10 November 2024, in accordance with the Financial Markets Act. Related link: Board Notice 676 - https://lnkd.in/eH7s62Ut Section 4 Conditions of Listing Clean - https://lnkd.in/e3m7UCSb

The FSCA, through Board Notice 675 of 2024, has approved amendments to the JSE Debt Listing Requirements, including the removal of section 19 as part of the Rejuvenation Project, in accordance with the Financial Markets Act, with the changes taking effect 30 days after their publication on 10 November 2024. Related link: Board Notice 675 - https://lnkd.in/e2d-Xg4m Section 19 Specialist Securities Clean - https://lnkd.in/e5nFCmsK

The information request aims to gather current regulatory data on trustees of retirement funds to enable the Authority to take action against non-compliant trustees. The Authority plans to publish a list of these trustees and requests that Principal Officers or Administrators submit the necessary information by 6 November 2024. Related link: FSCA Communication Request 3 of 2024 - https://lnkd.in/eS4dbt7F