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The Fourth Money Laundering Directive

The 4th ML Directive: Effective 26th June 2017

10th September 2015

After two years of debate, the Fourth Anti-Money Laundering Directive (4th ML Directive) has been finally cleared by the EU as a measure to strengthen the legal framework for Anti-Money Laundering (AML) within the EU. Now, member states must integrate the 4th ML Directive into national laws by 26th June 2017.

At that time, all regulated firms must comply with the directive’s requirements that aim to enhance the protection of the integrity, stability and reputation of the financial services sector from illicit money flows related to money laundering, organised crime and terrorist financing.

Who will the 4th AML Directive apply to?

The new Money Laundering Directive will apply to an array of businesses, from banks and other financial institutions as well as accountants and auditors. In addition the rules will also have to be complied with by other businesses that are involved in making or receiving cash payments for goods worth at least €10,000, whether or not payment for them is made in a single, or in a number of linked transactions.

Overview of the Directive Requirements:

The 4th ML Directive confirms the Customer Due Diligence (CDD) / ‘Know-your-Customer’ (KYC) requirements and introduces certain improvements to enhance ownership transparency and deal with issues that shell companies pose in order to comply with international standards and best practices.

The new ML Directive also has provisions relating to electronically or magnetically stored money and also sets forth co-operation duties that require entities to fully and promptly co-operate with the authorities first by reporting suspicious operations and then providing relevant information.

What's New

Financial Crime Systems & Controls

FCA Finalised Guidance effective 27th April 2015.

Complaints Handling Update

July’15: New rules announced for all regulated firms affecting complaints processing & reporting requirements.

Final Rules on Accountability

The FCA and the PRA have now published the finalised rules on Strengthening Accountability

FCA Finalises Timeline for Implementing MiFID II

Set to come into effect for all investment firms on

3rd January 2017

New Remuneration Rules

Regulators issue rules for dual regulated firms effective 1st July’15 & 1st January’16

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