Asset management companies handlelarge amounts of funds, making themprime targets for money
launderers.
Option A (Correct):Negative news (adverse media) screeningis essential for identifyingpotential
financial crime risks.
Option D (Correct):Understanding thesource and origin of assetsensures that fundscome from
legitimate sources.
Option B (Incorrect):PEPs should not be automatically rejected, butenhanced due diligence (EDD)is
required.
Option C (Incorrect):While onboarding interviews help,they are not a mandatory AML measure.
Option E (Incorrect):Financial stability reportsare useful, butnot directly linked to AML compliance.
AML Risks in Asset Management:
High-value transactions that may mask illicit wealth.
Layering through investment portfolios to hide the origin of funds.
Use of offshore structures to evade regulatory scrutiny.
Best Practices for AML in Asset Management:
Conduct enhanced due diligence (EDD) on high-net-worth clients.
Monitor large and unusual transactions.
Screen customers against PEP, sanction, and adverse media databases.
Reference:
FATF Recommendation 22 (AML for Asset Management)
6th EU Anti-Money Laundering Directive (6AMLD)
Wolfsberg Group Asset Management AML Framework
