Regulatory Alerts2024-02-08
Added · Updated
Effective Execution of Risk-based Approach for Customer Due Diligence
The Hong Kong Monetary Authority issued this circular to address supervisory observations regarding the execution of the risk-based approach for customer due diligence by Authorized Institutions. The regulator requires AIs to ensure CDD measures are risk-sensitive and proportional, explicitly prohibiting excessive information requests that duplicate known data or fail to account for varying money laundering risks. Additionally, the HKMA emphasized the need for balanced control designs that support frontline staff and prepare for new practical guidance on politically exposed persons following recent legislative amendments.