In Times of Change, Insight Comes First

In April 2025, the Hong Kong Securities and Futures Commission (SFC) released the latest "Guidelines on Combating Money Laundering and Terrorist Financing".

This update comes in response to the latest round of assessments by the Financial Action Task Force (FATF) and aims to enhance the transparency of Hong Kong's financial markets.

Key changes introduced in the guidelines include:

1. Enhanced Ongoing Customer Due Diligence: Financial institutions are now required to regularly update customer information.

2. Stricter Risk Assessment for Virtual Asset Transactions: Higher risk assessment standards will be applied to transactions involving virtual assets.

3. Clearer Suspicious Transaction Reporting Requirements: Suspicious transactions must now be reported within three business days of discovery.

These changes signify Hong Kong's continued efforts to tighten compliance oversight of financial institutions. They also indicate that investment institutions will bear greater responsibility in anti-money laundering (AML) compliance.

In response to these changes, it is recommended that investment institutions:

1. Update Internal Anti-Money Laundering and Customer Due Diligence Manuals: Ensure that internal guidelines reflect the latest compliance standards.

2. Enhance Anti-Money Laundering Training: Provide more robust training for frontline employees and compliance staff to address the evolving regulatory landscape.

3. Review and Improve Customer Data Integrity: Assess the completeness and accuracy of existing customer records and enhance capabilities for detecting suspicious transactions.

As the global regulatory environment continues to tighten, Hong Kong financial institutions must actively adapt to these changes to ensure continued compliance and safeguard their market reputation in the international financial sector.

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