The danger of being misused for the purpose of money laundering is one of the most severe operational risks faced by financial services providers in developed nations. Consequences include ruinous reputational damage, harsh financial sanctions through to being eliminated from the market. Helmut Ettl, Executive Directory of the Austrian Financial Market Authority emphasised this in his opening remarks to the “6th FMA Workshop on Compliance and Anti-Money Laundering in Vienna to around 350 participants from compliance management and anti-money laundering.
“The Financial Market Authority (FMA) has clearly demonstrated in recent years that it acts with consequent to ensure a clean financial centre. In Austria, the management of non-financial risks is no longer considered as nice to have, but is seen to be an absolute necessity”, remarked Ettl. “The FMA will continue to pursue its tried and tested approach of adopting a zero tolerance policy. Deficient procedures and systems for mitigating conduct and compliance risks as well as for preventing money laundering and terrorist financing are not trivial offences.”
At the FMA workshop, FMA experts report about current regulatory trends and supervisory initiatives in the fields of compliance, conduct supervision and anti-money laundering, and discuss then with practitioners from the market. The focus was on the European Union’s Anti-Money Laundering Package and the European Union’s new Anti-Money Laundering Authority (AMLA), the forthcoming FATF[1] inspection of Austria, as well as issues in relation to conduct supervision including experiences and supervisory expectations regarding fit and proper tests for key function holders, distribution of sustainable financial products as well as marketing communications. The guest speaker, economist Marcel Seifert from the Institute of Advanced Studies, reported on current findings in behavioural economics in relation to investor behaviour regarding sustainable financial products.
The FMA’s focus for inspections
The FMA conducts its supervision work in a risk-based manner, and therefore sets targeted thematic focuses. In the area of conduct supervision of banks, in the coming year the focus will address marketing communications, supervision on the area of crypto-asset services, IT risks as well as sustainable and the prevention of greenwashing. In the prevention of money laundering, the focuses for inspections in 2025 will in particular focus on Know-Your-Customer and update processes, group supervision as well as the use of new technologies or new business models.
Changes to the FMA’s Organisational Structure
Executive Director Ettl also announced some changes at the FMA that are important in this regard. From next year, the FMA’s Division for Conduct Supervision of Banks will be integrated in the FMA’s Banking Supervision Department. In addition, the remit of this department will be expanded to cover the issue of information security, a subject area that was recently regulated in the EU by the Regulation on Digital Operational Resilience in the Financial Sector – better known in the sector by the abbreviation DORA. This will mean that conduct supervision is more closely aligned with prudential supervision.
Reorganisation of anti-money laundering in Europe
The FMA welcomes the far-reaching reform in the combatting of money laundering and terrorist financing in the EU achieved by the AML package, which was published in June and which has entered into force. The new Anti-Money Laundering Authority (AMLA) was formally established in Summer 2024, and is expected to commence duties in 2025. The start of direct supervision by AMLA is scheduled for 2028. In the future, AMLA will directly supervise up to 40 of the most risk-exposed institutions in the EU. The FMA is currently preparing, along with the other Austrian bodies involved – which also include the Oesterreichische Nationalbank and the Ministry of Finance – for the fifth country inspection by the FATF, which starts at the end of October 2024 and is scheduled to last for 15 months.
“A Clean Financial Centre”
“As there are a large number of compliance officers and anti-money laundering officers gathered here today, I would like to take this occasion to emphasise that we consider you as partners in supervision, and that we stand alongside one another in the interests of having a clean financial centre”, Ettl remarked at the workshop. “We are all pursuing the same objective. It is important to see the big picture. Namely: we all want Austria to be a clean financial centre.”
Journalists may address further enquiries to:
Boris Gröndahl (FMA Media Spokesperson)
Telephone: +43 (1) 249 59-6010
Mobil: +43 676 8824 9995
E-Mail: [email protected]
[1] Financial Action Task Force on Money Laundering, an international organisation housed at the OECD acting as a standard-setter for AML/CFT and which checks compliance with these standards.