10.9 Interaction between supervisory and AML/CFT measures

Where competent authorities in the course of exercising their supervisory activities have reasonable indications of deficiencies in the investment firm’s systems and controls framework or the internal governance framework that are related to AML/CFT or reasonable grounds to suspect that the investment firm has increased exposure to ML/TF risks, they should:

• a. notify the AML/CFT supervisor of these deficiencies and risks as soon as they are identified;
• b. assess the impact that such deficiencies and risks may have on the prudential situation of the investment firm;
• c. liaise with AML/CFT supervisors and in line with the respective authorities’ mandates and functions, consider the most appropriate prudential supervisory measures to address these deficiencies and risks in addition to any measures taken by the AML/CFT supervisors.

Where the competent authorities are notified or become aware of supervisory measures or sanctions planned or imposed by the AML/CFT supervisors, they should consider whether and how the potential prudential implications of the weaknesses and failures identified by the AML/CFT supervisors need to be mitigated.