Following the end of the Consultation Period of the ‘Consultation Document on Guidance for Credit Institutions, Payment Institutions and Electronic Money Institutions opening accounts for FinTechs’ issued jointly by the FIAU and the MFSA, the same Authorities have now published the final version of the non-binding Guidance Document. These Guidelines are intended to provide further clarity to institutions approached by operators in the Fintech sphere with the aim of making bank account opening a smoother process.
The guidelines are intended to provide institutions with a clearer picture of what the operations of Fintech companies consist of, and how these companies combat the threats of money laundering and terrorist financing (ML/FT). While this document provides institutions with a solid foundation of data on understanding the risks of Fintech companies, this has to be combined with the institution carrying out an independent assessment of the ML/FT inherent in servicing each and every potential customer.
The final version of the guidelines makes several additions which are meant to help institutions carry out further checks on the (prospective) customer. One such addition would be to understand the risk of the jurisdiction where the Fintech Operator is authorised to provide its services. Furthermore, it is recommended to continuously monitor a customer’s application progress if they are currently in the process of acquiring a credit or financial institution license in a particular jurisdiction.
Institutions which are considering onboarding a DLT Exchange as a potential customer are also encouraged to obtain a copy of their by-laws. This is done in order for the institution to be able to review such by-laws and get a clearer picture of the customer’s activities. It may be the case that the aforementioned documents detail which assets are admitted to trading and under what conditions. Such extra information is of great benefit when considering the ML/FT risks arising from the services of the operator.
The Guidance Document is available publicly and can be accessed both through the website of the FIAU as well as that of the MFSA.
Article by Dr Gabriel Fenech.
This article is not intended to impart legal advice and readers are asked to seek verification of statements made before acting on them.