There are four proposed amendments to Regulation No. 2/2020, dated March 17, regarding the prevention of money laundering and terrorist financing.
Among the most significant changes suggested in this 30-day public consultation is the partial application of BCFT policy reporting to providers of crowdfunding services for equity or loans, as well as the expansion of reporting information by other entities already subject to it.
Crowdfunding service providers for equity and loans are currently not required to report this information, but the regulator believes they should be included.
“Given the nature of these entities (equivalent to obliged entities) and the fact that they are subject to specific PBCFT duties, the reporting requirements are less extensive and more simplified than for obliged entities,” the regulator explained.
The CMVM believes that the information required from these entities “is internally known and easy to collect,” but acknowledges total costs of 6,300 euros plus VAT for this process in the first year.
From a technical perspective, the market regulator has made two new suggestions: extending the reporting deadline from February 28 to March 31 of the following year, and changing the file format, with Annex I now required to be submitted in “.xml”.
In a statement released today, the CMVM noted that the project for these regulatory changes, five years after its enactment, is “crucial for achieving risk-based supervision,” in line with the standards of the Financial Action Task Force (FATF) and the guidelines of the European Banking Authority.
“These amendments, in addition to strengthening national supervision, also enable better cooperation and information exchange for BCFT purposes, eliminating the need for ad hoc and unanticipated requests for information,” it stated.
The CMVM proposes introducing 20 new reporting fields to “allow for a more precise characterization of the activities of obliged entities, particularly concerning their risk classification system, client and counterparty risk profiles, and the implementation of monitoring and auditing measures.”
The regulator estimates that changes in reporting will present a stand-alone cost of 5,600 euros plus taxes per obliged entity. For subsequent years, the cost is expected to be around 10% of that amount—globally, this translates to an investment of almost 1.4 million euros by the 246 entities required to report.
According to the CMVM, the “reduced regulatory uncertainty” concerning the requested content can bring benefits, with “improvement in the quality of information that underpins the supervision of the covered entities, to the benefit of investor protection, financial system stability, and market integrity.”
