As many of us in the industry are aware, the Financial system is governed by various bodies and regulators. In the United Kingdom, one of the most prominent tools in the Anti-Money Laundering, (AML) space, is the Financial Conduct Authority (FCA) handbook. The handbook guides Firms across a range of topics, from Financial Reporting Requirements to Market Abuse Regulation (MAR) and Market Conduct. One of the most important parts of this handbook is the guidance around the requirement for Firms to have a Money Laundering Reporting Officer, (MLROs) or otherwise known as a Nominated Officer under the Proceeds of Crime Act 2002 (POCA).
This requirement is widely recognised within many Financial Institutions, (FIs) however in the emerging market of Crypto assets, many start-ups are ill-equipped to fulfil such an obligation.
As per the FCA handbook:
‘The job of the MLRO is to act as the focal point within the relevant firm for the oversight of all activity relating to anti-money laundering. He/she needs to be senior, to be free to act on his/her own authority and to be informed of any relevant knowledge or suspicion in the relevant firm. '
For those firms that are just starting out within the Crypto industry, or even those more established, it is a legal requirement to have an MLRO/Nominated Officer. Understandably, many firms may not have the resources to satisfy such an obligation, or they may even be unsure as where to start with their AML/Counter Terrorist Financing (CTF) policies and procedures as a new firm.
This is where we can help!
Here at Lysis, we have designed a unique and innovative MLRO managed service model. Whether you are a small Crypto-currency start-up, or a well-established FI, we are here to help.
The scope of this service is to provide our customers with compliance support and an MLRO on an intermittent basis as required, in line with business and regulatory requirements. This support is aligned with the Financial Action Task Force (FATF), US, EU, and local regulations, plus the Wolfsburg Group’s AML and CTF standards as required.
Our managed service model is designed around six key elements, which enables us to offer an efficient and effective service:
Core Factors: Maintenance of Financial Crime (i.e., AML, anti-fraud, CTF and Anti-Bribery and Corruption (ABC)) programmes to monitor compliance across all relevant parts of the business, any vendor managed functions in line with UK regulatory requirements and the regulatory requirements;
Risk Assessments: Execution of an annual risk assessment relating to Financial Crime and incorporate conclusions into current policies and requirements. This also includes leading an annual update to AML policies and gaining sign-off from the Board of Directors;
Investigation: As part of our managed service, we would also oversee investigations into suspected Financial Crime, in addition to notifying the Board of Directors, (through timely reporting), of all incidences of non-compliance and breaches of regulation and legislation, as well as review and investigate Suspicious Activity Reports (SARs) and submit reports as a Nominated Person, where needed, to the local Financial Intelligent Unit (e.g., National Crime Agency [NCA]) and other relevant law enforcement agencies;
Systems and Controls: Make practical and acceptable recommendations where systems and procedures need enhancing to counter the risk of Financial Crime. Ensure the effective operation and monitoring of merchants and transaction screening services. Advise on the development and maintenance, and signing-off, where appropriate, of Financial Crime procedures. Lead on the management of service providers;
Reporting: Prepare regular reports on the outputs of the monitoring programmes to the Board of Directors, summarising key issues, results, conclusions, and actions taken. Produce an annual MLRO report for the Board of Directors. Undertake all regulatory reporting responsibilities with respects to Financial Crime. Co-ordinate the fulfilment of ad hoc orders received from regulatory or law enforcement agencies in a timely manner; and
Culture & Awareness: Develop and maintain an excellent compliance cultural and awareness within all departments in relation to AML. Manage the development and delivery of Financial Crime training courses to all management and staff. Conduct an annual assessment of training needs relating to AML and Financial Crime for all personnel. Ensure that your firm remains up to date with relevant regulatory developments.
For more information, contact us
References:  https://www.handbook.fca.org.uk/handbook  https://www.handbook.fca.org.uk/handbook/ML/4/?date=2005-04-02&view=chapter  https://www.handbook.fca.org.uk/handbook/MAR/1/?date=2005-04-02&view=chapter  https://www.legislation.gov.uk/ukpga/2002/29/contents  https://www.handbook.fca.org.uk/handbook/ML/7/?date=2005-04-02&view=chapter