Clifford Chance

Global efforts to enhance anti-money laundering (AML) measures to combat financial crime are increasing. In this extract from a recent Clifford Chance webinar, we look at the latest AML trends in the EU, US, UK and Singapore, what they mean for business and compliance processes and provide some practical suggestions for adapting to them.

The new EU Capital Requirements Directive (CRD6) will introduce a revised framework for assessing the suitability of directors and other senior managers of EU banks, including new requirements for key function holders and a new supervisory process for the prior assessment of the suitability of some appointments. It will also make other changes to the EU rules on bank governance. The text of CRD6 has now been adopted by a resolution of the European Parliament and the new rules for bank senior managers and governance are expected to take effect by end-2025.

The new EU Capital Requirements Directive (CRD6) will impose additional requirements on EU banks and their holding companies to pre-notify and, in some cases, pre-clear certain M&A transactions and reorganisations with their own supervisor. These new rules will apply to acquisitions and disposals of material holdings in both financial and non-financial sector entities, material transfers of assets or liabilities, and mergers and divisions. The text of CRD6 has now been adopted by a resolution of the European Parliament and the new rules on bank M&A and reorganisations are expected to take effect by end-2025.

The new EU Capital Requirements Directive (CRD6) will require Member States to apply minimum authorisation, reporting and supervisory requirements to local branches of non-EU banks (third-country branches or TCBs). It will also oblige Member States to give their supervisors powers to require the restructuring or subsidiarisation of systemically important TCBs. The new reporting rules for TCBs are expected to take effect by end-2025 with the other new rules for TCBs taking effect by end-2026.

The new EU Capital Requirements Directive (CRD6) will require non-EU entities intending to provide ‘core banking services’ in an EU Member State to establish an authorised local branch in that Member State unless one of the limited exemptions applies. A new Article 21c of the Capital Requirements Directive (CRD) will restrict the cross-border provision of loans or credit and guarantees or commitments by non-EU banks and the taking of deposits or other borrowing in the EU by any non-EU entity. The new rules are expected to take effect by end-2026.

While 2023 saw ongoing uncertainty and high-profile financial sector failures, it also brought regulatory progress around the world, including for landmark regulations on digital assets and AI. In 2024, we will see the next stage of pioneering regulation as blueprints and best practices begin to emerge, alongside compliance challenges.

This briefing highlights developments in the last six months, mapped to the list of 43 “core” EU financial services files in scope of HM Treasury's programme for the review, repeal, reform and replacement of EU derived-legislation under the Financial Services and Markets Bill, and shows the expected timing of the reforms.