AFME is pleased to publish “Anti-Money Laundering Transaction Monitoring in the Markets sector” in collaboration with EY. 

A key challenge that the industry faces is how to best identify money laundering activities. This has intensified in recent years following high profile cases in the capital markets space which has, understandably increased regulatory scrutiny of firms’ Anti-Money Laundering (AML) controls.

Firms do already have established Anti-Financial Crime programmes, designed to detect suspicion of money laundering, supported by AML transaction monitoring (TM). In this paper we consider the effectiveness of the processes that make up a firms AML TM control framework and provide a road map to support firms in designing and operating the most effective solution.

To enable this, we have explored several key themes in the preparation of this paper. We consider how effective the current AML TM approaches in the markets sector are and we review the results that they yield. We identify how existing AML TM systems can be enhanced and we consider the evolving skillset that is needed to support this.

We also look at the use of data, technology, and enhanced analytics to further drive improvements, building stronger more efficient solutions and leveraging opportunities for intelligence-led investigations. We also review the processes around the submission of Suspicious Activity Reports (SARs) and explore the advantages to the sector as a whole in establishing greater collaboration between private and public sector bodies. We conclude by considering the benefits of convergence, between market abuse surveillance function and the AML TM function.