COB 12.2.1 Guidance

1. The general duties set out in COB Rule 12.2.1 that apply to an Operator and Administrator, are in addition to the Principles for Authorised Firms that also apply to all firms.
Application of AML procedures
2. An Administrator that performs AML functions on behalf of an Operator of a Scheme, is required to satisfy applicable AML requirements. The AML module provides flexibility to apply a risk-based approach, taking into account the nature of the product or service involved, and the customer relationship. For example, the Administrator:
a. is required to undertake a risk-based assessment of every Participating Employer of the Scheme, and assign a risk rating proportionate to that employer (see AML Rule 6.1.1);
b. may assign to Members of an Employee Money Purchase Scheme a low AML risk rating, taking into account the low AML risks associated with schemes or arrangements that provide employment benefits, such as pension, gratuity, retirement and superannuation schemes where:
(i) the contributions are made by the Participating Employer in respect of each Member, and not by the Member;
(ii) the employment benefits of the Member are not assignable to a third-party; and
(iii) there are no other factors that suggest a higher risk of money laundering
3. AML Rule 6.1.2 sets out factors that may indicate higher money laundering risks and AML Rule 6.1.3 sets out factors that may indicate lower money laundering risks.
4. AML screening of a Member may be warranted before accepting voluntary contributions to a Scheme in certain circumstances, such as where the voluntary contributions:
a. substantially exceed the amount of mandatory contributions for that Member; or
b. are fully or freely withdrawable or assignable by the Member before the release of the mandatory contributions.
Derived from DFSA RMI261/2019 (Made 18th December 2019). [VER35/01-20]
[Added] DFSA RMI302/2021 (Made 30th June 2021). [VER38/09-21]