Spotlight Report - Brokerage Sector

AML and KYC Vulnerabilities

An in-depth look into the issue to help you to identify weaknesses in your existing compliance framework.

For years authorities across the world have been warning that the brokerage sector is increasingly becoming a target for criminals looking to legitimise the proceeds of crime.

Following a series of recent high-profile cases, financial regulators are now taking an even greater interest in the sector’s compliance with anti-money laundering (AML) and combatting the financing of terrorism (CFT) legislation.

KYC and AML are powerful complements to each other and important elements for brokers looking to protect themselves against fraud and financial crime. Both involve verifying the identity and legitimacy of individuals and organisations through rigorous checks. In itself, that makes it harder for criminals to operate. In addition, AML checks help to uncover the money trail, understanding where money comes from and how it’s spent so that organisations can ensure it’s not laundered through them.

In this industry report, we examine:

  • Where stockbrokers and broker-dealers may be vulnerable to AML risk
  • The current regulatory environment in the UK, EU, and US
  • The requirements for customer due diligence (CDD) and enhanced due diligence (EDD)
  • Screening for sanctions, ultimate beneficial owners (UBOs), and politically exposed persons (PEPs)
  • How to ensure compliance with AML regulations

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