Similarities and differences between AML/CTF and Regulatory Compliance

⚙ #AML/CTF (Anti-Money Laundering & Terrorist Financing) and #Regulatory #Compliance (e.g. #MiFIDII or #EMIIR) are closely related concepts within the #financialservices industry, but they serve different purposes. Here's an overview of their similarities and differences:

▶ Similarities:

📌 Both Aim to Ensure #Compliance: Both #AML/CTF and #Regulatory #compliance aim to ensure that financial services institutions adhere to relevant laws, regulations, and industry standards.

📌 #RiskManagement: Both involve #riskmanagement practices. They seek to identify, assess, and mitigate risks associated with financial transactions, customer interactions and behavior, and regulatory requirements.

📌 #LegalObligations: Both #AML/CTF and #Regulatory #compliance involve fulfilling legal obligations set forth by various authorities, such as government agencies, central banks, or international regulatory bodies.

📌 Enhancing #Transparency and #Integrity: Both contribute to enhancing trust and integrity in the financial system by deterring financial crimes, ensuring transparency, and maintaining ethical standards among the market participants.

▶ Differences:

📌 Scope and Focus: #AML/CTF primarily focuses on preventing and detecting #moneylaundering activities, #terroristfinancing, and other #illicit financial activities. Regulatory compliance, on the other hand, encompasses a broader spectrum of regulations and may cover areas beyond #financialcrime prevention, such as strengthening #investorprotection, improve the conduct of business rules and enhance competition in the trading and clearing of financial instruments.

📌 #LegalFramework: #AML regulations are often specific to combating financial crimes and are governed by laws like the #EU Anti-Money Laundering Directives and International Standards. Regulatory compliance, however, can encompass a wider range of laws and regulations depending on the #Financialmarkets, #securitiesmarkets, #posttradeservices, #companyreporting and #auditing and the nature of the financial institution's operations (e.g. #AIFM), for example the Market Abuse Regulation (#MAR), Investment Firms Directive (#IFD) and Regulation (#IFR), Securities Financing Transactions Regulation (#SFTR) and OTC Derivatives, Central Counterparties and Trade Repositories Regulation (#EMIR).