Specialised Solutions for Investment Bankers’ Compliance Management

We offer a comprehensive set of anti-money laundering (AML), counter-terrorist financing (CFT), and fraud prevention solutions for investment bankers’ anti-money laundering compliance that are tailored to applicable AML/CTF (aka CTF) laws, regulations, AML/CTF supervisors' guidance for this sector, covering investment banking AML red flags and indicators and AML check on investments to help your business meet applicable obligations that cover investment bankers’ money laundering and terrorist financing risk mitigation, fraud prevention, the detection and handling of other types of financial crime.

 

We have designed our AML solutions to help you navigate the complexities of the AML process in investment banking in a commercially oriented and goal-focused manner, providing effective AML/CTF support for all aspects of investment bankers’ AML/CFT compliance, including but not limited to:

• Business Profile and Strategic Factors:
• Your commercial objectives
• Your products
• The size and structure of your business
• Your available AML/CTF compliance technology and resourcing
• Your risk appetite for AML/CTF-related risks
• Your governance framework and reporting lines
• Your client demographics
•  Your countries of operation

 

• Applicable Regulatory and Fraud Prevention Obligations:
• AML/CTF regulations for investment bankers
• Any investment bankers’ fraud prevention obligations or expectations your business may be subject to
• Any related compliance obligations, including, but not limited to, investment bankers’ obligations under:

• Privacy laws
• Financial market laws
• Fair trading laws
• Financial licensing requirements
• Other relevant regulatory frameworks

• Operational AML/CTF Compliance Requirements:

• Money laundering and terrorist financing (ML/TF) risk assessment
• AML risk management
• AML checks on investments before, during and after onboarding
• Investment banking AML red flags applicable to your business

• Core AML processes in investment banking:

• Customer due diligence (CDD) and Know Your Customer (KYC) obligations for investment bankers
• Enhanced customer due diligence
• Transaction monitoring and surveillance
• Ongoing customer due diligence and transaction monitoring
• PEP identification and sanctions compliance
• Staff vetting and AML/CTF training
• Ad-hoc and periodic reporting
• Other obligations relating to investment bankers’ anti-money laundering, counter-terrorist financing and sanctions compliance, as well as financial crimes prevention

 

What Types of Investment Bankers Do We Support?

Focusing on money laundering (ML), terrorism financing mitigation (TF), and fraud prevention, our investment banking AML solutions address anti-money laundering compliance obligations for a range of investment banking firms and related institutions that are deemed to be AML/CTF designated service providers (aka “reporting entities”):

• Full-Service Investment Banks
• Boutique Investment Banks
• Institutional Brokers
• M&A Advisory Firms
• Private Equity and Venture Capital Firms (with investment banking functions)
• Capital Markets Firms
• Corporate Finance Advisory Firms
• Asset Management Divisions within Investment Banks
• Prime Brokerage Firms
• Prop Trading Desks
• Research & Advisory Firms
• Other financial institutions and businesses that provide AML/CFT-regulated investment banking services

 

What Jurisdictions Do Our Investment Banking AML Solutions Cover?

• Investment Bankers’ AML Solutions in Australia: Investment bankers’ AML requirements in Australia are enforced by the Australian Transaction Reports and Analysis Centre (AUSTRAC) under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and AML/CTF Rules.
• Investment Bankers’ AML Solutions in New Zealand: Investment bankers’ anti-money laundering compliance in New Zealand is supervised by the Financial Markets Authority (FMA) under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.
• Investment Bankers’ AML Solutions in the United Kingdom: Investment bankers’ AML requirements in the United Kingdom are enforced by the Financial Conduct Authority (FCA) under the Money Laundering Regulations 2017 and their subsequent updates, as well as the FCA AML/CFT guidance.
• Investment Bankers’ AML Solutions in the United States: Investment bankers’ anti-money laundering in the United States is subject to the Bank Secrecy Act (BSA) and supervised by the Financial Crimes Enforcement Network (FinCEN).
• Investment Bankers’ AML Solutions in the European Union: Investment bankers’ anti-money laundering compliance in the European Union is regulated by the European Banking Authority (EBA) and National Competent Authorities (NCAs) under the Sixth Anti-Money Laundering Directive (AMLD6) and its national implementations.
• Investment Bankers’ AML Solutions in Singapore: Investment bankers’ AML requirements in Singapore are enforced by the Monetary Authority of Singapore (MAS) and is regulated by various AML/CFT laws, including Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act along with MAS AML/CFT Notices and Guidelines.
• Offshore tax haven-based investment bankers that are subject to the AML/CFT compliance

 

Investment bankers’ AML Advisory and Support

Our AML/CFT advisory services for investment banking firms include, but are not limited to, the following:

• Detailed AML/CTF compliance advice: Tailored to the investment banking AML requirements and different AML checks on investments, including but not limited to customer due diligence (CDD), transaction risk scoring, transaction monitoring, customer onboarding and know-your-customer (KYC) analysis and other AML processes. Also tailored to the specific money laundering and terrorist financing (ML/TF) risks involved in these processes, helping you with effective ML/TF risk management.
• Investment banking fraud risk management advice: Advising on measures, controls, and processes for detecting, preventing, and responding to different types of fraud, scams, and other types of financial crime relevant to investment bankers. Also, tailored to the investment banking fraud environment, risk management practices, and stakeholders' expectations and obligations (banks, regulators, insurers, shareholders, etc.).
• Banking relationships advice: Advising investment bankers on AML/CTF issues related to maintaining and expanding their banking relationships, complying with banks' AML/CTF risk appetite standards, recall procedures and expectations, and other operational requirements.
• Operational AML/CTF advice: Advising support and KYC teams on core AML processes in investment banking, like day-to-day onboarding, support queue management processes, allocating AML/CFT resources effectively, and making operational improvements to enhance overall customer experience and AML compliance efficiency.
• Specific matter advice (difficult clients, high ML/TF risk matters, investment banking AML red flags, customer due diligence for high-net-worth clients, complex transactions and more): Advising on handling specific AML/CTF issues related to clients and complex and unusual transactions, including assessing the adequacy of Sources of Wealth (SOW) or Source of Funds (SOF) information and documentation for specific enhanced due diligence (EDD) cases.
• Peer benchmarking and best practices: Helping investment bankers compare their AML/CFT practices with industry standards, AML/CTF supervisor guidance, and internationally recognised best practices set up by international organisations like the Financial Action Task Force (FATF) for complying with investment bankers’ AML/CFT obligations.
• Government agencies liaison advice: Advising senior management and compliance teams on handling relationships with external bodies, including AML/CTF supervisors and law enforcement agencies, such as the FIU or its local equivalents.
• AML/CFT audit advice: Advising senior management and compliance teams on matters related to the statutory AML/CFT audits, including auditors' guidelines, requirements, AML/CFT audit process, and obligations related to the audit's outcome, tailored to both generic investment bankers’ anti-money laundering compliance obligations and your specific situation.
• AML/CFT remediation advice: We help investment bankers to effectively navigate situations involving an AML/CFT breach, warning, or investigation. The cost of non-compliance can result in significant regulatory fines and penalties, as well as irreparable reputational damage. Therefore, when you are on your supervisor's radar, it’s essential to have AML/CFT advisors who know how to set things right and effectively engage with AML/CFT supervisors and other stakeholders. For more details, please visit our Remediation Solutions page.
• Further information: You can visit our AML advisory page for an extensive list of AML/CFT advisory services we offer to support investment bankers’ anti-money laundering compliance, as well as AML/CFT compliance for other types of financial institutions and businesses subject to the AML/CFT regime.

 

AML/CFT Training and Capacity Building

We offer the following set of AML/CFT training and education solutions tailored to the investment bankers’ AML/CFT compliance requirements:

• Customised AML/CFT Training Solutions: Specialised AML training sessions for various teams, including management, compliance, operations, sales, and customer relations, focusing on the AML checks on investments, AML/CFT awareness, best practices, and ML/TF red flags.
• Up-to-date Regulatory AML Updates: Keeping your compliance officers, managers, and teams updated with changes in the investment banking AML requirements, AML regulations and guidance.
• Workshops on Emerging Trends and Red Flags: Advising on new AML trends, red flags, and typologies relevant to investment bankers’ money laundering, terrorist financing, fraud, and other types of financial crime.
• Practical Workshops: Interactive workshops for effective and goal-oriented AML/CTF compliance, capacity planning, resource allocation, covering core AML processes in investment banking, including:

• KYC procedures for investment bankers
• KYB analysis and ML/TF risk assessment application to specific clients, transactions and situations
• The investment bankers’ money laundering risks, common money laundering schemes and terrorist financing methods
• Improvements in clients' onboarding and transaction monitoring procedures
• Addressing investment banking AML red flags
• Reg-tech for AML compliance
• Internal and external AML/CTF reporting
• Related risk and compliance issues, including financial crime prevention
• Application of the risk-based approach to investment bankers’ money laundering, fraud risks, and terrorism financing
• Suspicious matter reporting guidelines
• The implementation of customer identification programs and KYC procedures
• Strategic and operational ML/TF risk management
• Other obligations related to the investment banking AML requirements

• Practical Compliance Applications: Ensuring the practical application of training, focusing on real-world investment bankers’ money laundering, terrorist financing, and common investment banking fraud scenarios, as well as specific challenges related to the investment bankers’ AML/CTF compliance that your business is likely to face.
• Further information: You can visit our AML training solutions page for an extensive list of AML/CFT training solutions we offer to investment bankers and other businesses subject to AML/CFT regulations.

 

Comprehensive AML/CFT Managed Solution for Investment Bankers

Our investment banking AML/CFT compliance management solutions include but are not limited to:

• AML/CFT Compliance Leadership: We act as your dedicated AML/CFT compliance officers (aka “Money Laundering Reporting Officers” or (MLROs)) and as compliance managers, fully managing AML/CFT compliance and handling the investment bankers’ anti-money laundering obligations for your business.
• Investment Bankers’ Anti-Money Laundering Risk Management: Conducting detailed assessments to identify ML/TF risks, assess their inherent impact and likelihood of occurrence for your business, evaluate the effectiveness of mitigations and controls in place, and formulate residual risk ratings.
• Managing Client Onboarding Process and Customer Due Diligence: Implementing robust Know Your Customer (KYC), Know Your Business (KYB), customer due diligence (CDD), and enhanced due diligence (EDD) processes, for all types of clients, including higher ML/TF risk clients to cover the necessary AML checks on investments.
• PEP and Sanctions Screening: Managing thorough compliance with AML surveillance requirements by screening against global sanctions and politically exposed persons (PEPs) lists. This covers both initial and ongoing screening, as well as escalation processes for true positives.
• UBO Verification Streamlining: Verification of beneficial ownership in line with the investment banking AML requirements, identifying and assessing individuals who hold ultimate control over assets. This includes initial and ongoing checks, with procedures to address discrepancies and high-risk cases as they arise.
• Investment Banking AML Red Flags: Developing and implementing a set of business-specific ML/TF alerts and red flags to detect and report suspicious transactions, helping you comply with the investment banking AML requirements in a commercially efficient manner without making AML/CFT compliance a business hindering factor.
• Transaction Monitoring and Investment Banking Fraud Prevention Solution: Related to AML processes in investment banking, we also help with the implementation of fraud alerts and red flags to detect, prevent, and respond to fraudulent transactions and activities.
• AML/CFT Tech Handling: Leading the alignment of AML/CFT technology implementation with your business processes and AML/CFT objectives. This also includes reviewing AML/CFT technology against the investment banking AML requirements and your core policies and procedures.
• AML/CTF and Data Sharing: Handling information requests from law enforcement agencies, AML/CTF supervisors, and other relevant AML/CTF-designated entities—such as your banking partners, FX platforms, liquidity providers, finance providers, etc.—to help you manage your AML/CTF compliance-related communications.
• Internal AML/CFT Reporting Solutions: Facilitating structured reporting workflows for your board and its delegate committees, with a specific focus on AML/CFT compliance. This includes:

• preparing and presenting comprehensive AML/CFT performance metrics
• providing insights into AML/CFT compliance effectiveness
• reporting on the effectiveness of internal controls and mitigations for your general AML/CFT obligations and the sector-specific investment bankers’ money laundering risks
• identifying areas for improvement

Our AML/CFT compliance reports cover:

• your ongoing compliance status in relation to the investment banking AML requirements
• ongoing progress against your organisation-wide AML/CFT compliance calendar
• alignment of your business's AML/CFT performance with specific project goals and relevant KPIs
• other factors to ensure that the management function is well-informed and aligned with the AML/CFT compliance requirements for investment bankers.

• Investment Banking AML/CFT Compliance and Externally Reportable Matters: Implementing effective external reporting procedures to help you comply with the investment bankers’ anti-money laundering requirements for reporting captured activities and transactions. This includes managing externally reportable matters covered by the following report types: Suspicious Activity Reports (SARs), Suspicious Matter Reports (SMRs), Suspicious Transaction Reports (STRs), Prescribed Transaction Reports (PTRs), Threshold Transaction Reports (TTRs), and their equivalents.
• Periodic AML/CFT Reporting: Organising and overseeing the preparation, data storage, and effective submission of required periodic reports to your AML/CTF supervisors, ensuring compliance with the investment banking AML requirements for statutory reporting.
• Investment banking fraud Prevention Management: Implementing targeted fraud prevention measures, enhancing internal controls, and helping you comply with internal policies and external regulations. We work to mitigate fraud risks without disrupting business processes, aligning fraud prevention efforts with your broader compliance objectives.

 

KYB Solutions for Investment Bankers’ Anti-Money Laundering Compliance

We offer a range of KYB solutions to help you effectively comply with the investment banking AML requirements. These include:

• Establishing ML/TF risk scoring models and parameters for different risk categories: We establish criteria to assess the ML/TF risk levels of your client base by identifying key risk factors based on their business nature, activities, jurisdictions, and other relevant characteristics and develop a risk scoring model to classify clients into different ML/TF risk categories such as low, medium, and high risk.
• Implementing a Customised KYB Process: We can help you roll out the KYB process across all departments to help your teams become sufficiently trained and equipped to handle clients' ML/TF risk effectively when it comes to verification, monitoring, ongoing due diligence, and other processes.
• KYB Technology and Automation: We select and evaluate technologies that can automate various parts of the KYB process, such as data collection, risk scoring, sanctions screening solutions, and ongoing monitoring.
• KYB-Related Escalation Process: We can develop and implement a clear escalation procedure for handling high-risk clients or irregularities, including the triggers for escalation, the actions required at each step, and the responsibilities for resolving these issues.

 

Core Policies and Procedures for Investment Bankers’ AML/CFT Compliance

We develop, enhance, and implement a set of core policies, manuals, frameworks, and procedures for effective investment banking AML/CFT compliance management, including the following:

• Investment banking AML/CFT Framework Development: Covering specific investment banking AML requirements and obligations under national AML/CTF laws and regulations, any applicable AML/CFT guidance, your risk appetite, your existing human and technology resources, your business structure, your history of AML/CFT compliance, and your current and future business goals.
• AML/CTF Risk Assessments: Focused on the investment banker's AML requirements for risk management as they relate to specific ML/TF risks and investment banking AML red flags faced by your business in terms of its size, products, client types, jurisdictions of operation, delivery channels, and the financial institutions it interacts with when delivering its services. Also covering the assessment of the effectiveness of existing controls and mitigations in place to determine the residual risk rating for both general ML/TF risks relevant to the most designated service providers/AML/CFT reporting entities and industry-specific ML/TF risks faced by investment bankers as these apply to your business operations. Visit our AML/CTF Risk Assessment page for more information.
• Comprehensive AML/CTF Programs (aka "AML/CFT Programme" in some jurisdictions): When it comes to investment bankers’ anti-money laundering compliance, your AML/CFT program is a core document that details how your business complies with various compulsory AML/CFT obligations, covering:

• the initial and ongoing CDD and EDD processes
• verification methods and requirements for identity, address, and source of funds
• internal and external reporting
• ongoing due diligence
• transaction monitoring
• employee vetting and training
• PEP and sanctions screening, and more

Our investment banking AML solution is about grounding your AML/CTF program in reality and developing it based on your circumstances, including:

• your AML/CFT Risk Assessment
• your available ML/TF systems and controls
• your available resources
• your compliance budget
• your AML/CTF compliance team's experience and size
• your stakeholders' interests
• your available AML technology and other relevant factors
• Further Information: Visit our AML/CTF Programs page for more information.

• Investment banking AML/CTF Procedures for Effective AML Compliance: Effective procedures are another core pillar of investment bankers’ AML/CTF compliance. This is why our solutions cover the development and enhancement of a detailed set of AML/CTF procedures and protocols to meet the distinct needs of your business, with a focus on effective AML risk management across various business processes and the investment banking AML requirements as they apply to AML checks on investments at each step of your customer journey.
• AML Manuals and Guidelines: These are more detailed, practical resources that support the procedures by providing step-by-step instructions, specific reference points, and standards. Depending on your business size and complexity, we develop and enhance internal manuals and guidelines necessary for effective and efficient AML/CTF compliance. These include AML Operating Manuals, guiding materials, and guidelines that outline what to do for each process, step, or decision within your procedures covering core AML processes in investment banking.
• ML/TF Controls Mapping: Implementing controls based on your documented risks is another cornerstone of investment bankers’ anti-money laundering compliance. We help you develop, map, and assess your internal ML/TF controls and improve their effectiveness to ensure compliance with investment banking AML requirements, address specific financial crime, money laundering, and terrorist financing trends, and respond to any findings from internal and external AML/CFT auditors and supervisors.
• AML Red Flag Identification and Response Protocols: This is another area where a well-written AML policy or program must face the reality of operational speed, the workload across different teams, available tools, client base size, and other factors. That is why another part of our investment banking AML/CFT solution focuses on developing clear guidelines for identifying and responding to red flags indicative of fraud, money laundering, or terrorist financing activities, enabling you to take timely and appropriate action in different circumstances.
• AML/CTF Policy Update: Assisting with the review and enhancement of your core AML/CTF documents and operational procedures to reflect changes in your AML policies, including those caused by:

• updates in the AML/CTF laws, investment bankers’ AML regulations or AML supervisors’ sector guidance
• internal changes in your business structure, size, and resources
• the launch of new products or expansion to new jurisdictions
• changes in your risk appetite
• changes in related obligations, such as privacy laws, information sharing, investment banking fraud prevention requirements, and more
• AML/CFT issues identified during internal or external reviews or audits
• other relevant factors

 

AML/CFT Technology Integration Support

Streamlining AML Compliance: Our investment bankers’ AML solutions include needs assessment and assistance in selecting and integrating appropriate AML technologies for efficient investment bankers’ anti-money laundering compliance management. This includes AML compliance technologies and tools that cover:

• Customer Due Diligence Automation
• E-KYC and Online Identity Verification
• Customer Onboarding Streamlining
• PEP and Sanctions Screening
• Ultimate Beneficial Owner (UBO) identification,
• KYB Solutions and AML/CFT Risk Management
• Investment Banking AML Red Flags and AML Alert Management
• Ongoing Due Diligence Obligations Management
• Internal AML/CFT reporting
• Investment Bankers’ AML/CFT Obligations for External Reporting
• AML/CFT Incident Management
• Exception Escalation and Management
• AML/CFT Management Automation: Including automated response workflows and AI technology
• Customisable AML/CFT measures specific to onboarding and monitoring of your high ML/TF risk clients
• Investment Bankers’ AML/CFT Obligations for Record-Keeping
• Investment Bankers’ Fraud Prevention
• Transaction Monitoring and Surveillance: Including transaction monitoring tools to automate detection and response to money laundering and terrorist financing red flags
• Effective CRM for handling AML Processes in Investment Banking

 

Investment Banking AML/CFT Audit Solutions

Having over ten years of AML/CFT compliance experience, ranging from AML/CFT framework and controls development and testing to successful AML/CFT management and issues resolution for various reporting entities, gives us the necessary expertise and qualifications to be your AML/CFT auditors.

We offer two comprehensive AML/CFT audit options to review your compliance with investment bankers’ anti-money laundering obligations. These options are:

Statutory AML/CTF Audit Option: A comprehensive review of your existing AML/CTF framework to assess whether your business complies with AML/CTF standards and applicable obligations. We independently test your compliance with both local AML/CTF requirements and core AML processes in investment banking. These often include but are not limited to:

• adherence to your AML/CTF risk assessment and operational AML/CFT procedures, including the existence of controls and mitigations to address money laundering and terrorist financing risks identified in your risk assessment
• compliance with your core AML/CFT documents, including sample testing
• your CDD requirements
• your staff vetting requirements
• your AML/CFT management processes
• your client onboarding and offboarding processes
• your EDD requirements, including source of wealth (SOW) and source of funds (SOF) requirements and application of the risk-based approach to different ML/TF risk levels
• your transaction monitoring process, covering large, complex, and unusual transactions and patterns
• your ODD processes
• your record-keeping process
• your suspicious matter reporting process (also known as "suspicious activity" or "suspicious transaction" reporting in some jurisdictions)
• your other reportable transactions process (typically covering cash and cross-border transactions)
• the way you detect and address material changes in client relationships
• your initial and ongoing screening process
• and other obligations for investment banking AML/CFT compliance

Assurance Levels: Our statutory AML/CFT audit options are available as both:

• A limited assurance audit
• A reasonable assurance audit

Further Information: Please visit our AML/CFT Audit page for more information.

Internal AML/CFT Audit Option: Apart from an independent statutory audit, we also offer an internal AML audit option to prepare investment bankers for an external audit by an independent auditor, an AML/CTF supervisor's review, or a review by another significant business stakeholder, such as a banking partner or an equity purchaser. This option is also suitable for significant business events like reorganisation or expansion.

Here, we go beyond merely meeting investment banking AML requirements and focus on evaluating the effectiveness of your AML/CFT controls and ML/TF risk management processes for alignment with:

• the ML/TF risks faced by your business, including your Know Your Business (KYB) analysis
• investment bankers’ anti-money laundering compliance obligations
• your current and future goals
• your business model
• your current and prospective client inflow
• the specific AML/CFT compliance areas or requirements (this process can be tailored to address particular AML issues or compliance areas, ensuring a targeted approach to investment bankers’ anti-money laundering compliance)

We help you not only identify any gaps and weaknesses but also provide insights on how to enhance your controls and respond to these in a commercially oriented manner for smarter AML/CFT compliance. Please visit our Internal AML/CFT Review Solution page for more information.

AML/CFT audit-related solutions:

• Post-Audit Remediation Support: We assist with the implementation of post-audit remediation actions, addressing and resolving any identified AML/CFT issues.
• AML/CFT Attestation Support: Our investment banking AML solutions include helping you prepare the required attestations for your AML/CFT supervisor and other stakeholders. This involves confirming that all necessary remedial actions have been completed and that adequate AML/CFT compliance measures have been put in place.
• Post-Audit Stakeholders' Liaison: We manage your communications with national AML/CTF supervisors, banks, auditors, insurers, and other stakeholders, ensuring smooth progress in reporting on the status and completion of your post-audit action plan.

 

Investment Banking Fraud Prevention Solutions

The investment bankers’ anti-money laundering control environment is closely related to prevention of financial crime in general, and fraud prevention in particular. Investment banking fraud prevention controls and ML/TF controls can form a unified compliance management framework tailored to the specific ML/TF and fraud risks your business is facing or is likely to face.  This is often reflected in your operational process. For example, AML checks on investments accommodate fraud prevention requirements and investment bankers’ AML/CFT obligations. Our Investment Banking Fraud Prevention Solutions include:

• Fraud Risk Assessment and Analysis: Conducting assessments to identify and prioritise fraud risks across your operations, allowing you to allocate resources effectively.
• Incident Response and Investigation: Creating response plans to manage fraud incidents, including guidelines for investigating, documenting, and applying corrective actions to minimise potential damage.
• Implementing Preventive Measures: Setting up checks, alerts, and controls to tackle fraud risks in the investment banking sector, as well as drafting a set of procedures and guidelines to address fraud scenarios that you are likely to face or have faced.
• Data Analytics for Fraud Detection: Leveraging data analytics to identify focus points for your fraud prevention efforts and areas for improvement.
• Fraud Detection Technology Implementation: Choosing and helping you implement appropriate technology for real-time fraud detection.
• Fraud Awareness Training: Educating staff about fraud risks, including identity theft and impersonation.
• Further information: Please visit our Fraud Management Solutions page for more information.

Investment Banking Fraud Response Requirements: In the current risk and compliance environment, implementing fraud prevention measures is either already mandated by law in some jurisdictions or, at minimum, expected by government agencies, financial market participants, and other stakeholders.

 

Broader Risk & Compliance Solutions for Investment Bankers

Your AML/CFT compliance is generally more effective when the right hand knows what the left hand is doing, and at the very least, they do not interfere with each other. Incorporating your controls and procedures for compliance with the investment banking AML requirements into an overall risk and compliance management framework efficiently can increase your overall risk compliance effectiveness. This is where our experience can help you. Apart from AML/CFT compliance solutions for investment bankers, we include the following risk and compliance solutions:

• Compliance Advisory and Management: A comprehensive set of solutions for second-line compliance management, including both compliance advisory and compliance management options. Visit our Compliance Solutions page for Investment Bankers for more information
• Third-line Compliance Assurance: A range of third-line compliance defence solutions covering compliance assurance program development and implementation, internal controls design, and controls testing solutions
• ISO Standards Compliance: A range of solutions for compliance with the International Organization for Standardization (ISO) standards, helping you prepare for ISO certification
• FATCA and CRS Compliance: A comprehensive set of solutions for complying with the Foreign Account Tax Compliance Act (FATCA) and the Common Reporting Standard (CRS) requirements, including tax residency verification, ongoing due diligence, reporting, and record-keeping
• Privacy Law Compliance: A range of solutions covering development, implementation, and testing of data privacy controls, procedures, and tools required to meet the applicable obligations under the Privacy Act, the GDPR, ISO 27701, etc.
• Financial Licensing and Registration: A set of financial licensing solutions for investment bankers, including preparation, licensing process management, regulator liaison, and post-licensing support in:

• The United Kingdom
• The United States
• Australia
• Singapore
• Offshore financial centres and tax havens
• New Zealand
• The European Union

 

Common Money Laundering Risks for Investment Bankers

Investment Bankers’ money laundering risk types can be broadly classified into five categories:

• Product types (services offered)
• Delivery methods
• Customer types
• The institutions involved in delivering your services
• Jurisdictions of operation

Given the variety of products offered by different businesses, as well as their different business structures and operations, the examples below of money laundering risks faced by investment bankers represent only a sample and are not exhaustive.

 

AML Processes in Investment Banking and Product-Related ML/TF Risks

Some of the product-related ML/TF risks relevant to investment bankers’ anti-money laundering compliance include:

• Failure to Monitor Complex Portfolios: Lack of controls to assess and monitor high-value portfolios with diverse asset classes (capital markets firms, private equity and venture capital firms, asset management divisions, prop trading desks).
• Insufficient Scrutiny of Asset Transfers Within Managed Accounts: Weak oversight of intra-account asset transfers, particularly those without clear economic justification (private equity and venture capital firms, capital markets firms).
• Failure to Verify Source of Funds for High-Value Transactions: Absence of controls to verify the legitimacy of funds used for large investment purchases, IPO subscriptions, or private placements (capital markets firms, full-service investment banks).
• Insufficient Due Diligence on Customised Financial Products: Lack of measures to evaluate tailored financial products designed for individual clients (corporate finance advisory firms, boutique investment banks).
• Weak Monitoring of Early Redemptions or Premature Liquidations: Lack of controls to flag frequent or large-scale liquidations without clear rationale (capital markets firms, asset management divisions, private equity and venture capital firms).
• Unverified Client-Directed Portfolio Allocations: Allowing clients to dictate complex portfolio structures without adequate oversight (prop trading desks, private equity and venture capital firms).
• Failure to Monitor Cross-Border Investment Activity: Lack of transaction monitoring for cross-border trades within managed portfolios (capital markets firms, private equity and venture capital firms).

 

AML Processes in Investment Banking and Jurisdictional ML/TF Risks

Some of the jurisdictional risks relevant to investment bankers’ money laundering prevention include:

• Investment Transfers for Fund Movement Rather than Genuine Returns: Lack of controls to identify investments structured to obscure the source of wealth for the recipient. This typology often involves transfers from higher to lower ML/TF risk jurisdictions, where the recipient claims their source of wealth as payments received from legitimate-looking activities (private equity and venture capital firms, boutique investment banks).
• Weak Monitoring of Investment Ownership Transfers Across Jurisdictions: Lack of controls to assess and monitor ownership transfers to unrelated third parties in different jurisdictions (M&A advisory firms, corporate finance advisory firms, capital markets firms).
• Failure to Monitor Changes in Beneficial Ownership in Cross-Border Corporate, Trust, or Investment Vehicle Clients: Absence of controls to detect and verify changes in beneficial ownership, especially where new owners are linked to higher ML/TF risk jurisdictions (private equity and venture capital firms, boutique investment banks).
• Inadequate Screening for Foreign PEPs and Sanctions Lists: Lack of systems to effectively screen foreign politically exposed persons (PEPs) or match individuals and entities against sanctions lists (full-service investment banks, capital markets firms).

 

AML Processes in Investment Banking and Delivery Method ML/TF Risks

Some of the service delivery method-related ML/TF risks relevant to investment bankers’ anti-money laundering compliance include:

• Remote Onboarding Without Effective EKYC Processes: Lack of controls to verify and link client identity to the documents provided during remote onboarding
• Reliance on Third-Party Brokers Without Oversight: Absence of measures to monitor AML/CFT compliance practices of brokers or intermediaries facilitating high-value investment banking transactions increases exposure to financial crime (institutional brokers, capital markets firms).
• Failure to Monitor Non-Traditional Payment Channels in Investment Banking Transactions: Lack of controls to identify suspicious patterns in non-traditional payment methods, such as digital wallets, crowdfunding platforms, or P2P systems, (prime brokerage firms, corporate finance advisory firms).
• Insufficient Monitoring of Cross-Border Payment Flows:
  Failure to apply effective transaction monitoring and due diligence to payments routed through multiple jurisdictions, especially those involving high-risk jurisdictions (full-service investment banks, M&A advisory firms).
• Unverified Remote Modifications to Account Access or Authorisations: Lack of verification controls for changes made remotely to account access or transaction authorisations (prime brokerage firms, asset management divisions).
• Absence of Controls for Unusual Large or Complex Transactions: Failure to investigate significant, complex, or unusual transactions processed remotely without clear documentation (capital markets firms, boutique investment banks).

 

AML Processes in Investment Banking and Customer-related ML/TF Risks

Some of the customer type-related ML/TF risks relevant to investment bankers’ money laundering prevention include:

• Corporate Clients Using Complex Ownership Structures: Failure to verify beneficial ownership in corporate clients with layered ownership arrangements, such as trusts or shell companies (private equity and venture capital firms, capital markets firms).
• Clients Operating in High-Risk Sectors: Lack of measures to monitor clients involved in industries associated with higher ML/TF risks, such as extractive industries, cash-intensive businesses (full-service investment banks, M&A advisory firms).
• Non-Resident Clients from Higher ML/TF Risk Jurisdictions:
  Insufficient due diligence to verify the legitimacy of source of wealth and funds for non-resident clients linked to higher-risk jurisdictions (institutional brokers, capital markets firms).
• Clients Using Gatekeepers to Facilitate or Obscure Transactions:
  Lack of controls to assess and monitor gatekeepers such as lawyers, accountants, or other intermediaries structuring transactions or concealing beneficial ownership (corporate finance advisory firms, M&A advisory firms).
• Clients Using Nominees or Intermediaries Without Transparency:
  Absence of controls to identify and investigate transactions involving nominees or intermediaries conceals the true ownership and economic purpose of funds (prime brokerage firms, capital markets firms).
• Customers with Unexplained Wealth or Sudden Influx of Funds:
  Failure to address discrepancies between declared wealth and financial activity, including sudden large inflows of funds without clear economic rationale (private equity and venture capital firms, full-service investment banks).

 

AML Processes in Investment Banking and Institutional ML/TF

Some of the institutional risks relevant to investment bankers’ anti-money laundering compliance include:

• Engagement with Unregulated or Informal Financial Entities: Lack of controls to identify risks posed by partnerships with unregulated private funds, informal networks, or platforms outside traditional regulatory oversight (private equity and venture capital firms, capital markets firms).
• Reliance on Third-Party Introducers Without Oversight: Failure to monitor or audit the AML/CFT compliance practices of third-party introducers, brokers, or intermediaries responsible for onboarding clients (institutional brokers, full-service investment banks).
• Lack of Coordination with Payment Facilitators:
  Absence of systems to coordinate with payment facilitators for verifying the originators and beneficiaries of high-value transactions (capital markets firms, corporate finance advisory firms).
• Weak Monitoring of Inter-Bank Transfers and Syndicated Transactions:
  Lack of controls to detect unusual or suspicious activity in multi-party transactions, such as syndicated loans or inter-bank fund transfers (full-service investment banks, boutique investment banks).
• Inadequate Oversight of Proprietary Trading Desks:
  Failure to monitor trading activities conducted by internal proprietary desks for large, unusual, or high-risk trades that could conceal fund movements (prop trading desks, asset management divisions).
• Insufficient Due Diligence on Correspondent Banking Relationships:
  Weak controls to assess and monitor correspondent banking accounts, particularly in jurisdictions with weaker AML/CFT oversight (prime brokerage firms, full-service investment banks).

 

 

Common Anti-Money Laundering Requirements for Investment Bankers

Given the variety of investment bankers’ AML requirements, this list is not exhaustive:

• Conducting customer due diligence, including appropriate KYC checks: Ensuring verification of customers’ identities, as well as identities of beneficial owners of customers that are legal entities.
• Transaction monitoring in investment banking: Monitoring deposits, withdrawals, and other transactions to identify and report suspicious transactions and patterns.
• ODD requirements: Conducting ongoing customer due diligence, which is generally based on the customers' ML/TF risk profiles and ML/TF risk categories, as well as changes in their activities, behaviours, or risk factors.
• Staff Vetting: Performing comprehensive background checks and ongoing vetting of staff to maintain high standards of integrity and awareness.
• Reporting Certain Non-Suspicious Transactions: Obligation to report cross-border or cash transactions over a certain threshold, as per the local AML/CFT regulations, in a timely manner. However, if the transaction is processed through a local bank or another reporting entity, reporting requirements may depend on the local AML/CFT regulatory interpretation.
• Compliance with the regulatory obligations: Including registering with your local AML/CTF supervisor, appointing an AML/CTF officer or an MLRO, answering requests for information from the police, regulators and your AML/CTF supervisor, filing an annual report and more.
• Regular Staff Training: Providing continuous training to ensure employees are aware of AML/CFT protocols and can recognise red flags.
• Timely Reporting of Suspicious Transactions: Ensuring that suspicious transactions and activities are reported to the relevant authority (either your local AML/CFT supervisor or a financial intelligence unit (FIU)) within the required deadlines.
• ML/TF Risk Assessments: Conducting regular assessments of ML/TF risks faced by your business is a part of AML risk management for investment bankers.
• Independent AML/CFT Audits and Investment Bankers: Organising periodic independent reviews of the AML/CFT program, other core documents, and components of your AML/CFT framework to assess their existence, compliance, application, and, where applicable, effectiveness, depending on local AML/CFT audit guidance.
• Applying EDD measures: Conducting enhanced due diligence on certain customers and certain transaction types.
• Establishing Clear AML/CFT Policies and Procedures: Creating documented guidelines for staff to follow.
• Monitoring PEPs and Sanctioned Entities: Implementing measures for additional scrutiny of politically exposed persons and entities on sanction lists.
• Screening Against Watchlists: Regular checks of clients against domestic and international watchlists.
• Ensuring Proper Record-Keeping: Maintaining detailed and accurate records of client information and transactions in compliance with AML/CFT regulations.

 

AML Checks on Investments and Common AML/CFT Issues

The following list of AML/CFT issues during and after onboarding is not exhaustive:

During Customer Onboarding

• Failure to Apply Enhanced Due Diligence Measures for Sanctions and PEP Risks: Inadequate processes to assess the risk level of identified sanctions-listed individuals or politically exposed persons (PEPs), including their family members or close associates, and to apply enhanced due diligence where required (full-service investment banks, capital markets firms).
• Failure to Identify Clients Requiring Enhanced Due Diligence (EDD):
  Lack of procedural frameworks to determine which clients need EDD based on factors such as jurisdiction, source of wealth, and risk level, leading to inconsistent application of additional due diligence measures (prime brokerage firms, boutique investment banks).
• Lack of Defined Triggers for Investigating Complex Ownership Structures:
  Absence of controls to investigate trusts, offshore entities, or multi-layered corporate structures used by clients during onboarding to obscure beneficial ownership (M&A advisory firms, private equity and venture capital firms).
• Inadequate Risk Categorisation of Clients:
  Failure to implement robust mechanisms for categorising clients by ML/TF risk levels, resulting in high-risk clients being misclassified or overlooked for EDD (institutional brokers, full-service investment banks).

After Customer Onboarding

• Failure to Set Triggers for Large, Complex, or Unusual Transactions:
  Absence of effective transaction monitoring systems with clearly defined triggers to identify and investigate transactions or patterns that deviate from a client’s normal behaviour (capital markets firms, private equity and venture capital firms).
• Insufficient Controls for Cross-Border Transactions:
  Lack of systems to monitor and investigate the purpose, origin, and destination of frequent or high-value cross-border fund movements, especially involving jurisdictions with weaker AML/CFT frameworks (full-service investment banks, M&A advisory firms).
• Unverified Changes to Account Ownership or Beneficiaries:
  Failure to verify or assess frequent changes in account ownership, authorised signatories, or beneficiaries, particularly those involving corporate or trust structures linked to high-risk jurisdictions (prime brokerage firms, capital markets firms).
• Absence of Periodic KYC Reviews:
  Failure to conduct regular reviews of client profiles, financial activity, and risk categorisation to ensure information remains accurate and reflects any changes in risk exposure (corporate finance advisory firms, asset management divisions).
• Lack of Controls to Detect Misuse of Multiple Related Accounts:
  Failure to monitor and assess the purpose behind clients operating multiple related accounts to obscure transactions or launder funds, often through coordinated transfers or investments (institutional brokers, private equity and venture capital firms).

 

AML Checks on Investments and Basic CTF Risks

The following list of Basic CTF Risks for Investment Bankers is not exhaustive:

• Lack of Controls to Identify Suspicious Patterns in Capital Market Transactions: Absence of systems to detect irregular behaviours in IPO subscriptions, bond issuances, or equity placements (capital markets firms, boutique investment banks).
• Failure to Conduct Enhanced Due Diligence on High-Risk Clients: Lack of measures to assess clients involved in M&A deals, private placements, or high-value transactions, particularly those from higher ML/TF risk jurisdictions or flagged industries (M&A advisory firms, private equity and venture capital firms).
• Failure to Monitor Small, Structured Transactions Below Reporting Thresholds: Absence of systems to detect cumulative patterns of low-value trades or fund transfers designed to evade reporting thresholds, often routed through trading desks or client investment accounts (prop trading desks, institutional brokers).
• Weak Screening Against Sanctions and Terrorist Links: Insufficient systems to screen transaction flows, counterparties, or beneficiaries for links to sanctioned entities or designated persons flagged for terrorism financing (full-service investment banks, capital markets firms).
• Failure to Monitor Cross-Border Transactions in High-Risk Jurisdictions: Absence of controls to assess multi-jurisdictional fund flows in bond syndications, equity issuances, or structured finance deals (M&A advisory firms, corporate finance advisory firms).
• Failure to Monitor Sudden Changes in Client Activity:
  Lack of controls to detect shifts in trading volume, unusual fund flows, or unexpected account closures that could indicate potential misuse for terrorist financing (prop trading desks, full-service investment banks).
• Failure to Verify Source of Wealth and Funds from High-Risk Industries:
  Lack of measures to assess the legitimacy of funds originating from sectors prone to ML/TF risks, such as mining, gambling, or unregulated digital assets (private equity and venture capital firms, capital markets firms).
• Inadequate Training on CTF Risks Specific to Investment Banking:
  Failure to provide targeted training on terrorism financing indicators relevant to complex financial products, cross-border deals, or high-value transactions (all types of investment banks).

 

 

AML Checks on Investments and Fraud

The following list of Investment bankers’ Fraud types is not exhaustive:

• Investment Bankers and Identity Fraud: Fraud involving identity theft or impersonation to access client accounts, conduct unauthorised transactions, or manipulate sensitive client data (prime brokerage firms, asset management divisions).
• Investment Bankers and Securities Fraud: Fraudulent misuse of client accounts or proprietary trading platforms for insider trading, market manipulation, or fabricating securities transactions (prop trading desks, capital markets firms).
• Investment Bankers and Insider Fraud: Fraud involving employees exploiting privileged access to internal systems to manipulate client portfolios, engage in unauthorised trading, or leak confidential data (full-service investment banks, boutique investment banks).
• Investment Bankers and Tax Fraud: Facilitating or being complicit in tax evasion schemes, such as creating fictitious offshore entities, misrepresenting taxable income, or assisting clients in avoiding capital gains taxes (corporate finance advisory firms, M&A advisory firms).
• Investment Bankers and Cross-Border Fraud: Fraudulent activities involving multi-jurisdictional transactions, such as laundering funds through cross-border investments or creating shell companies to conceal transaction origins (capital markets firms, private equity and venture capital firms).
• Investment Bankers and Digital Asset Fraud: Fraud involving cryptocurrencies or other digital assets, such as unauthorised access to digital wallets, manipulation of blockchain transactions, or misrepresentation of token offerings (prime brokerage firms, asset management divisions).
• Investment Bankers and Transaction Fraud: Fraud involving forged documentation or altered instructions to initiate unauthorised fund transfers or asset movements (institutional brokers, corporate finance advisory firms).
• Investment Bankers and Technology Fraud: Exploitation of vulnerabilities in trading algorithms, client data repositories, or settlement systems to misappropriate funds or manipulate transactions (prop trading desks, capital markets firms).
• Investment Bankers and Fund Mismanagement Fraud: Mismanagement of client or institutional funds, including embezzlement, deliberate underperformance, or misallocation of assets for personal gain (full-service investment banks, private equity and venture capital firms).
• Investment Bankers and M&A Fraud: Fraud during mergers or acquisitions, such as misrepresenting financials, inflating valuations, or concealing liabilities to manipulate deal outcomes (M&A advisory firms, boutique investment banks).

 

 

 

Investment Banking AML Red Flags

The Financial Action Task Force (FATF) and various national AML/CTF supervisors outline the following non-exhaustive list of ML/TF red flags for investment bankers’ anti-money laundering compliance:

• Unexplained Source of Wealth or Funds: Clients unable to provide verifiable documentation to substantiate the source of funds, particularly in large-scale investment banking transactions such as IPOs or private placements (capital markets firms, full-service investment banks).
• Transactions Involving Higher ML/TF Risk Jurisdictions: Cross-border transactions originating from or directed to jurisdictions with weak AML/CFT frameworks, particularly those involving layered financial instruments or complex deal structures (private equity and venture capital firms, boutique investment banks).
• Frequent Use of Gatekeepers Without Transparency: Involvement of intermediaries, such as lawyers or accountants, who structure transactions or investments without disclosing the client’s identity or role (M&A advisory firms, corporate finance advisory firms).
• Unusual Patterns of Small Transactions: Frequent low-value transactions that cumulatively represent significant sums, often designed to evade detection or reporting thresholds in proprietary trading or managed accounts (prop trading desks, asset management divisions).
• Involvement of Sanctioned or higher ML/TF risk PEPs: Transactions involving individuals or entities flagged on sanctions lists or presenting PEP-related risks, particularly when EDD is not applied effectively (full-service investment banks, capital markets firms).
• Unexplained Changes in Ownership Structures: Sudden and frequent changes to beneficial ownership, legal ownership arrangements, or shareholding structures without a clear purpose (private equity and venture capital firms, M&A advisory firms).
• Investments in High-Risk or Illiquid Asset Classes: Disproportionate investments in cryptocurrencies, private equity, or NFTs without supporting documentation or declared purpose (capital markets firms, asset management divisions).
• Client Requests for Anonymity: Requests for anonymity in deal structuring, transaction handling, or investment ownership without legitimate business justification (boutique investment banks, corporate finance advisory firms).
• Discrepancies Between Declared Wealth and Activity: Significant discrepancies between a client’s declared income or wealth and financial activity, particularly in large-scale M&A or capital markets transactions (M&A advisory firms, full-service investment banks).
• Rapid Buying and Selling of Securities: Unusual and rapid trading activity in securities that deviates from the client’s stated investment objectives or risk profile, indicating potential layering or market manipulation (prop trading desks, capital markets firms).
• Transfers to New Providers Upon Additional Due Diligence Requests: Clients consistently moving entire portfolios or terminating agreements when additional due diligence information is requested may signal attempts to evade scrutiny (full-service investment banks, corporate finance advisory firms).
• Deposits from Offshore Tax Havens: Incoming funds from jurisdictions known for secrecy or weak AML/CFT controls, obscuring the true source of funds (private equity and venture capital firms, prime brokerage firms).
• Unverified Payments from Third Parties: Payments originating from unrelated third parties or intermediaries without clear economic rationale, especially in high-value transactions (capital markets firms, M&A advisory firms).
• Rapid Movement of Funds Across Multiple Jurisdictions: Quick transfers across multiple countries, particularly those involving higher ML/TF risk jurisdictions, without clear economic rationale (capital markets firms, full-service investment banks).
• Anonymous Financial Instruments: Transactions involving bearer shares or other instruments designed to obscure ownership (boutique investment banks, corporate finance advisory firms).
• Negative Media Coverage of Clients or Entities: Adverse media reports on a client, their associated entities, or business partners indicating potential illegal or unethical behaviour (M&A advisory firms, private equity and venture capital firms).
• Higher Volume of SARs or STRs Linked to Specific Clients: Repeated filings of suspicious activity reports for clients or related entities, indicating ongoing suspicious behaviours (full-service investment banks, institutional brokers).