PRA Dear CEO – Money Laundering / Terrorist Financing risks in prudential supervision
- Dear CEO letter about Money Laundering/Terrorist Financing risks in prudential supervision
- Ppublished by the PRA on 5 September 2019
- This Dear CEO letter has been written to draw attention to the recently-published European Banking Authority (EBA) Opinion about the same topic
- The PRA suggests that this letter is relevant to Chief Executive Officers of PRA-regulated firms subject to the Capital Requirements Regulation (CRR)
- The PRA fully supports the EBA Opinion and will continue to consider money laundering and terrorist financing (ML/TF) concerns in its prudential assessments of firms, especially those stemming from Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) authorities’ assessment of these risks.
- The PRA will also continue to consider the extent to which ML/TF concerns may have an impact on its prudential objectives and act on those concerns.
It is the responsibility of all firms to ensure that members of the management body and senior management are, at all times, of sufficiently good repute, and possess sufficient knowledge, skills and experience to perform their duties (‘fit and proper’).
Firms are reminded that, in line with Prudential Regulation Authority General Organisation Requirements (GOR) Rule 2.1, a firm must have robust governance arrangements. This includes a clear organisational structure with well defined, transparent and consistent lines of responsibility, effective processes to identify, manage, monitor and report the risks it is or might be exposed to, including ML/TF risks, and internal control mechanisms, including sound administrative and accounting procedures and effective control and safeguard arrangements for information processing systems.
It is important that the FCA-prescribed senior management responsibility for financial crime is allocated to individuals of sufficient seniority to perform the role effectively.
Timeline with relevant dates to be logged on regulatory calendar
- Letter produced on 5 September 2019
The PRA supervisors will consider the points raised in the EBA Opinion and this letter as part of its ongoing supervisory engagement.
If firms have any queries about the content of this letter, please contact your usual supervisory contact.