Enhanced Competency Framework on Anti-Money Laundering and Counter-Terrorist Financing

Our Ref.: B9/166C 13 December 2016 The Chief Executive All Authorized Institutions Dear Sir/Madam, Enhanced Competency Framework on Anti-Money Laundering and Counter-Terrorist Financing I am writing to introduce the launch of the Enhanced Competency Framework (ECF) on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT). The ECF on AML/CFT is a collaborative effort of the HKMA and the banking sector in establishing a set of common and transparent competency standards for raising and maintaining the professional competence of relevant practitioners taking charge of the AML/CFT compliance function in AIs (AML/CFT practitioners). Taking into account the level of experience exhibited in different roles of AML/CFT practitioners in the industry, the ECF on AML/CFT is designed to target at practitioners of two different levels – the Core Level targeting at entry-level practitioners with not more than three years of relevant experience and the Professional Level targeting at practitioners with experience of three years or more in the AML/CFT compliance area. Details of the application of the ECF on AML/CFT, including the scope of application, the qualification structure, certification and grandfathering arrangements, and continuing education requirements are set out in the Guide attached to this letter. In view of the more apparent shortage of entry-level staff, the Core Level is first rolled out for use by AIs now, to be followed by the Professional Level next year. The industry will be further consulted on the syllabus coverage of the Professional Level and the mechanism for obtaining accreditation as well as the exemption arrangements in relation to recognised professional qualifications in due course.

• 2 - Staff training is an essential element of an effective AML/CFT system. The Supervisory Policy Manual module CG-6 “Competence and Ethnical Behaviour” also emphasises the importance of ensuring continuing competence of staff members. AIs are encouraged to adopt the ECF on AML/CFT as a benchmark for enhancing the level of professional competence of banking practitioners responsible for AML/CFT compliance roles. Apart from supporting their staff to attend training and examination that meet the ECF benchmark, AIs are also advised to keep records of the relevant training and qualification of their staff and to provide them with necessary assistance in relation to applications for grandfathering and certification, and fulfilment of on-going continuing professional development training under the ECF on AML/CFT. In its supervisory process, the HKMA will take into account the progress of implementation of the ECF by AIs as one of the factors for assessing AIs’ effort in enhancing staff competence and on-going development. The Hong Kong Institute of Bankers (HKIB) is the administrator of the ECF on AML/CFT, whose major roles in this respect include administering examinations, handling certification and grandfathering applications and maintaining a public register of qualified certification holders. The HKIB is also the initial provider of training course for the Core Level of ECF on AML/CFT and the first round of training for the Core Level will be available for enrolment in Q1 2017. AIs may direct any enquiries regarding grandfathering, training and other related arrangements to Mr Wai-hung Yeung of HKIB on 2153 7886 or Ms Jessica Tsoi on 2153 7882. In the meantime, if you have any enquiries relating to this circular, please contact Mr Raymond Tsai on 2878 1060 or Miss Rita Kong on 2878 8303. Yours faithfully, Arthur Yuen Deputy Chief Executive Encl. c.c. FSTB (Attn: Ms Eureka Cheung) HKIB (Attn: Ms Carrie Leung, Chief Executive Officer)