The Effectiveness of Anti-Money Laundering / Counter Financing of Terrorism Requirements in Fund Management Companies

Abstract

Anti-Money Laundering / Counter Financing of Terrorism (AML/CFT) broadly encompasses regulatory requirements, acts and guidelines designed to curtail the practice of generating funds through unlawful or criminal activities. Several infringement notices were issued to market intermediaries due to provision breaches of the guidelines. Although policies and procedures have been tightened up to the level of satisfaction, assessing the effectiveness of AML/CFT legislation is still necessary. The main aim of the study is to examine the independent variables, namely competency level of compliance team members, regulatory compliance and quality of AML/CFT framework that influence the effectiveness of AML/CFTrequirements of the compliance officers that are working in FMCs in Malaysia. The Expectancy Theory has been applied to form the framework and to develop the hypotheses. Three hypotheses were developed and tested using the data from 70 samples of FMC's in Malaysia. The result of the study showed that there were significant relationships between the factors analysed in this study. This study will help the financial institutions especially the Fund Management Companies (FMCs) in understanding the factors that influence the effectiveness of AML/CFT requirements and taking necessary action to enhance their internal AML/CFT process and its compliance with the regulations. This would help the FMCs to have effective control of AML/CFT during the on-boarding and ongoing monitoring process.

The Competency And Awareness Level Of Anti-Money Laundering & Counter Financing Terrorism Risk Judgment Amongst Malaysian Banking Compliance Officers

“…The set of instruments on competency and awareness were replicated and modified from Khan et al (2021) and Omar et al (2015) to suit the measurement better. Interval and 5 Likert scales (1-5) were utilized in the questionnaire for both independent variables.…”

The Observational Study Financial Fraud Offense Themes and Financial Fraud Risk of Money Laundering to Increase Financial Global Sustainability Compliance

“…Banks and financial institutions are responsible for creating an anti-money laundering division within their compliance departments. The purpose of anti-money laundering and counter financing of terrorism requirements is to regulate transactions; record and file reports of cash purchases more than $10,000 (daily aggregate amount); identify suspicious behavior or patterns related to financial crimes such as money laundering, terrorist financing, tax evasion, and other criminal activities; and conduct customer due diligence to maintain regulatory compliance (Khan et al, 2021;Mugarura, 2014). Based on certain financial crime risk categories such as amount of transactions, number of transactions, and rule types, an alert triggers in the banking system to indicate the compliance department of unusual activity.…”