AML/CTF: regulatory perspectives and trends

In the dynamic and complex world of finance, combating money laundering and terrorism financing (AML/CTF) has become an undeniable priority for both regulatory authorities and financial institutions. From the implementation of stricter regulations to the adoption of innovative technologies, the AML/CTF landscape is constantly evolving, challenging financial institutions to remain agile and adaptive in their approach to combating these threats.

In this opinion section, we ask our members about the regulatory outlook and emerging trends in AML/CTF.

Comillas SFF

From the point of view of the AML sector, 2024 is a year full of corrective exercises, although no major changes are expected with respect to the standards set in 2023. 

Following the inspections, feedback and meetings held with the CSSF and focusing specifically on alternative funds, we can confirm the following trends in Luxembourg:

  • The CSSF is placing special emphasis on the analysis and due diligence of fund assets and their screening against international sanctions. This is a complicated field because many vehicles invest through brokers and in OTC securities, and it is not possible to identify the counterparty to transactions, so the due diligence analysis must be carried out thoroughly on the broker or platform as a first step. Likewise, country risk updates and the exposure of real estate funds to these environments, with changing conflicts, must be taken into account.
  • The regulator is paying special attention to the perfect coordination of actions and data regarding the annual RC Report, the external audit of AML and the documentation related to the investment policies and risk of the funds. Any discrepancies in this area are highlighted and must be rectified at the risk of sanction.
  • Finally, and with the introduction of new types of assets, specifically crypto and tokenization, the regulator is putting special pressure on the delegation of these functions to be carried out by TAs that have the appropriate risk, on-boarding and screening systems for the instrument and that there is an alignment with the general risk policy of the rest of the fund.

Definitely and based on the 2023 reports, this year we expect a trend in the reinforcement of control measures and in the examination of fund managers, especially RRs, of their knowledge of fund activity and the specifics of Luxembourg legislation and practice.

Comillas 2 SFF


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