The International Securities Services Association (ISSA) has adopted a set of financial crime compliance principles for securities custodians and intermediaries.
ISSA notes that the principles are designed to address the critical challenges posed by financial crime while seeking to preserve the value that the securities services industry generates for investors and the capital markets.
Broadly speaking, the principles:
- Focus on the Custodian’s relationship with its account holders, including other custodians;
- Address cross-border relationships which are defined as relationships in which the account holder is foreign or which concern the deposit of foreign or international securities;
- Address relationships maintained with regulated financial institutions even if Custodians may decide to extend these Principles to all the relationships they maintain for other types of customers.
The Principles provide practical guidance to global custodians, sub-custodians, fund distributors, trustees/depositary banks, brokers, prime brokers and (International) Central Securities Depositories who intermediate cross-border securities on how to most effectively counter the risks of money laundering, terrorist financing, market abuse, corruption, fraud and the evasion of sanctions.
“As the only association representing firms active in all aspects of securities services, ISSA has been uniquely placed to translate the demand from senior executives from across the industry for an effective and practical response to the challenges posed by financial crime”, says Josef Landolt, CEO of ISSA.
ISSA has founded a dedicated Working Group to provide securities service providers with the tools and the practical guidance they will need to apply the standards in the coming years.
Further information on the principles can be downloaded here.