Read about the European Supervisory Authorities’ Joint consultation here.
The EMA has responded to the European Supervisory Authorities’ Joint consultation on risk factors and simplified and enhanced customer due diligence as under 4MLD. The EMA welcomed the format of the draft guidance, which set out an initial section with generic guidance followed by sector-specific guidance.
The response highlights a number of points:
– the guidance around the treatment of Politically Exposed Persons (PEPs) is overly complex, and risks excluding PEPs from financial services as the cost of maintaining their accounts may outweigh any commercial benefit for providers.
– the guidance for around correspondent banking relationships could lead to the conclusion that banks have to take steps to “know their customer’s customer”, which will exacerbate de-risking, a phenomenon that has had a negative impact on the e-money and money service business sectors in recent years
– several detailed comments around risk factors that indicate higher or lower risk in the e-money sector.
Read the EMA response here.