March 2017

The new EU Funds Transfer Regulation 2015 (FTR 2015), which transposes into EU law some of the anti-money laundering and counter-terrorist financing non-binding recommendations put forward by the Financial Action Task Force (FATF), comes into effect from 26 June 2017 – but what exactly is changing and how will it affect financial institutions or their clients? In an interview series with The Banker, Stefan Fruschki, Head of Regulatory Management, Institutional Cash Management, Deutsche Bank, explains the incoming developments.

Originating from the issuance of revised FATF recommendations in 2012 and the recognised need to establish international standards, FTR 2015 is regional in scope, but in practice, can have global implications for payment service providers established in other regions as well.

In the first interview, Fruschki explains how FTR 2015 updates and extends existing requirements for transfers of funds – where at least one payment service provider is established within the European Union (EU) or European Economic Area (EEA). While this constitutes an evolution on the pre-existing framework, there is more to the regulation than meets the eye.

As such, in interviews two and three, Fruschki delineates in further detail the updated framework’s scope and requirements – and identifies the implementation challenges that financial institutions may face. In particular, further specificity over certain requirements is needed from the upcoming European Supervisory Authorities’ guidelines to avoid disruption around implementation or falling short of its aims.

As the effectiveness of FTR 2015 depends on a common understanding and implementation of the requirements by payment service providers and regulators, any aspects open to interpretation must be resolved ahead of the implementation date. In the final interview, Fruschki emphasises that a common understanding about the FTR 2015 is crucial if the industry is to not only remain compliant but achieve the regulation’s objectives. With this in mind, Fruschki says, “We, as an industry, must get it right.”

To read the article click here

To watch the video chapters click below

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