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Abstract Syntax Notation One (ASN.1) is a standardized language used for describing data structures in a platform-independent and machine-readable format. It is widely used in telecommunications and computer networking to ensure that data exchanged between systems is interpreted consistently, regardless of the underlying hardware or software.
An Account Information Service Provider (AISP) is a type of financial service provider that, with the customer's consent, accesses and consolidates information from one or more of the customer's payment accounts held with different banks or financial institutions. AISPs offer services that allow customers to view and manage their finances from multiple accounts in one place, typically through an app or online platform.
The Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of business entities, public accountants, and corporate service providers in Singapore.
Account takeover fraud is a type of cybercrime where an unauthorized individual gains access to a victim's online account, such as banking, email, or social media, by stealing login credentials. Once access is obtained, the fraudster can change account details, make unauthorized transactions, or use the account for further fraudulent activities. This type of fraud often involves phishing, malware, or data breaches to acquire the necessary information. It poses significant risks to both individuals and organizations, leading to financial loss and compromised personal information.
AOPP, or Address Ownership Proof Protocol, is a cryptographic standard used in the cryptocurrency industry to verify ownership of a specific blockchain address.
Advanced Persistent Threats (APTs) are sophisticated and prolonged cyberattacks typically orchestrated by well-funded and skilled adversaries, such as nation-states or organized criminal groups. These threats aim to gain unauthorized access to a network and remain undetected for an extended period, allowing attackers to steal sensitive data, monitor activities, or disrupt operations.
Advance Fee Fraud is a type of scam where the perpetrator convinces the victim to pay a fee upfront with the promise of receiving a larger sum of money or a valuable service in return.
The Alternative Investment Market (AIM) is a sub-market of the London Stock Exchange, established in 1995 to help smaller and growing companies access capital. AIM offers a more flexible regulatory environment compared to the main market, making it attractive for companies seeking to raise funds with fewer listing requirements.
An American Depositary Receipt (ADR) is a financial instrument that represents shares in a foreign company, allowing U.S. investors to trade in international stocks on American stock exchanges. ADRs are issued by U.S. banks and provide a convenient way for investors to diversify their portfolios with foreign equities without dealing with the complexities of international trading.
An AML (Anti-Money Laundering) Audit is a comprehensive review and assessment of an organization's policies, procedures, and controls designed to prevent and detect money laundering activities. This audit ensures compliance with relevant laws and regulations, evaluates the effectiveness of the AML program, identifies potential risks, and recommends improvements.
AML Monitoring refers to the process of continuously observing and analyzing financial transactions and activities to detect and prevent money laundering activities. This involves the use of advanced software and analytical tools to identify suspicious patterns, unusual behaviors, and potential compliance violations. Financial institutions and regulatory bodies implement AML (Anti-Money Laundering) monitoring to ensure adherence to legal requirements, protect the integrity of the financial system, and mitigate the risk of financial crimes.
AML Trainings refer to educational programs and courses designed to equip individuals and organizations with the knowledge and skills necessary to detect, prevent, and report money laundering activities.
Anti-Financial Fraud (AFF) refers to the strategies, practices, and technologies implemented to detect, prevent, and combat fraudulent activities in financial systems. This includes safeguarding against identity theft, credit card fraud, money laundering, and other illicit financial schemes.
The Anti-Money Laundering Act (AMLA) is a legislative framework designed to prevent and combat money laundering activities. It establishes legal and regulatory measures that financial institutions and other entities must follow to detect and report suspicious financial transactions.
AMLC stands for Anti-Money Laundering Compliance. It refers to the set of procedures, laws, and regulations designed to prevent the practice of generating income through illegal actions. AMLC involves the implementation of policies and controls by financial institutions and other regulated entities to detect, report, and prevent money laundering activities.
AMLD stands for Anti-Money Laundering Directive. It is a set of regulations and guidelines established by the European Union to prevent money laundering and terrorist financing. The directive requires financial institutions and other regulated entities to implement robust customer due diligence, reporting, and record-keeping measures to detect and prevent illicit financial activities.
An Anti-Money Laundering Program (AML Program) is a set of procedures, policies, and controls implemented by financial institutions and other regulated entities to detect, prevent, and report money laundering activities.
The Anti-Phishing Group (APG) is an organization or collective initiative focused on combating phishing attacks, which are fraudulent attempts to obtain sensitive information such as usernames, passwords, and credit card details by disguising as a trustworthy entity in electronic communications.
An Asset-Backed Token (ABT) is a type of digital token that represents ownership of a tangible or intangible asset, such as real estate, commodities, or financial instruments. These tokens are typically issued on blockchain platforms, providing a secure and transparent way to trade and manage assets.
An "Asset Freeze" is a legal measure that restricts an individual or entity from accessing or transferring their financial assets. This action is typically imposed by courts or regulatory authorities to prevent the dissipation of assets during legal proceedings, investigations, or sanctions.
An Asset Protection Trust (APT) is a legal structure designed to safeguard an individual's assets from creditors, lawsuits, or other financial liabilities. Typically established in jurisdictions with favorable trust laws, such as certain U.S. states or offshore locations, APTs provide a high level of confidentiality and security.
The Association of Certified Anti-Money Laundering Specialists (ACAMS) is a leading international organization dedicated to enhancing the knowledge and skills of professionals in the field of anti-money laundering (AML) and financial crime prevention.
The Association of Chartered Certified Accountants (ACCA) is a globally recognized professional accounting body that offers the Chartered Certified Accountant qualification.
Auction Rate Securities (ARS) are a type of long-term financial instrument with interest rates or dividend yields that are periodically reset through auctions, typically every 7, 28, or 35 days. These securities are often issued by municipalities, corporations, or student loan companies and are designed to act like short-term investments due to their frequent rate adjustments.
AUSTRAC, short for the Australian Transaction Reports and Analysis Centre, is Australia's financial intelligence agency and regulatory body. It is responsible for monitoring financial transactions to detect and prevent money laundering, terrorism financing, and other serious financial crimes. AUSTRAC works closely with law enforcement agencies, regulatory bodies, and international partners to ensure the integrity of Australia's financial system.
Authentication to Authorization (A2A) refers to the process of securely verifying a user's identity (authentication) and then determining their access rights and permissions (authorization) within a system or application.
Backtesting is a financial analysis process used to evaluate the effectiveness of a trading strategy or model by applying it to historical market data. This method helps traders and analysts assess how a strategy would have performed in the past, providing insights into its potential future performance.
The Bank for International Settlements (BIS) is an international financial institution that serves as a bank for central banks, promoting global monetary and financial stability.
The Bank Identifier Code (BIC) is an international standard used to uniquely identify banks and financial institutions worldwide. It is an 8 or 11-character code that facilitates secure and efficient communication and transactions between banks, particularly in international transfers.
Banking as a Service (BaaS) is a financial technology model that enables third-party companies, such as fintech firms or non-banking businesses, to offer banking services by integrating with traditional banks' infrastructure via APIs.
The Bank Secrecy Act (BSA), enacted in 1970, is a U.S. law designed to combat money laundering and other financial crimes. It requires financial institutions to maintain records and file reports on certain transactions, particularly those exceeding $10,000, to help detect and prevent illegal activities.
The Bar Council is a professional body responsible for regulating and representing barristers, who are specialist legal advocates, in certain jurisdictions. It ensures the maintenance of professional standards, provides guidance and support to its members, and works to uphold the rule of law and access to justice.
The Basel Committee on Banking Supervision (BCBS) is an international regulatory body that formulates broad supervisory standards and guidelines for banks. Established by the central bank governors of the Group of Ten (G10) countries in 1974, the committee aims to enhance financial stability by improving the quality of banking supervision worldwide.
Batch processing in data refers to the execution of a series of tasks or transactions on a large volume of data as a single group or "batch." This approach is typically used when the data processing does not need to occur in real-time and can be scheduled to run at specific intervals.
Behavioral biometrics refers to the identification and verification of individuals based on their unique patterns of behavior. Unlike traditional biometrics, which rely on physical characteristics like fingerprints or facial features, behavioral biometrics analyze actions such as typing rhythm, mouse movements, gait, and even voice patterns.
A beneficial owner is an individual or entity that ultimately owns, controls, or benefits from an asset, property, or company, even if the title or legal ownership is in another name.
Beneficial Ownership refers to the rights and privileges of ownership over an asset or property, even if the title is in another name. A Beneficial Owner is the individual or entity that ultimately benefits from or has control over an asset, such as shares in a company, despite not being the nominal owner. This concept is crucial in financial and legal contexts to ensure transparency, prevent fraud, and combat money laundering by identifying the true individuals who hold significant influence or control over an entity.
The Black Market Peso Exchange (BMPE) is an underground financial system primarily used in Latin America, particularly Colombia, to launder money derived from illegal activities such as drug trafficking. In this scheme, drug traffickers sell their U.S. dollars to brokers at a discounted rate.
Blockchain Analysis refers to the process of examining, interpreting, and visualizing data on blockchain networks. This involves tracking transactions, identifying patterns, and understanding the flow of digital assets to uncover insights, detect fraudulent activities, ensure regulatory compliance, and enhance security.
A block list is a compilation of entities, such as email addresses, phone numbers, IP addresses, or user accounts, that are restricted or denied access to a particular service, platform, or network. This list is often used to prevent unwanted communication, enhance security, and protect against spam, fraud, or other malicious activities.
The Bureau of Industry and Security (BIS) is a U.S. government agency within the Department of Commerce. It is responsible for advancing national security, foreign policy, and economic objectives by regulating the export of sensitive goods, technologies, and software.
Business Continuity (BC) refers to the strategic and tactical capability of an organization to plan for and respond to incidents and disruptions in order to continue business operations at an acceptable predefined level.
Business Email Compromise (BEC) is a type of cybercrime where attackers use email fraud to target businesses, often with the goal of tricking employees into transferring money or revealing sensitive information.
A Business Risk Management System (BRMS) is a structured framework designed to identify, assess, and mitigate risks that could potentially impact an organization's operations and objectives. It integrates risk management practices into business processes, enabling companies to proactively address uncertainties and minimize potential threats.
A Business Rule is a specific, actionable directive or guideline that defines or constrains some aspect of business operations.
A Business Rules Management System (BRMS) is a software solution designed to define, deploy, monitor, and maintain the complex decision logic used by an organization. It allows businesses to automate decision-making processes by managing and executing business rules, which are the specific conditions and actions that guide business operations.
The Capital Requirements Regulation (CRR) is a key component of the European Union's financial regulatory framework, aimed at ensuring the stability and resilience of financial institutions. It sets out the minimum capital requirements that banks and other financial entities must hold to cover their risks and safeguard against financial distress.
"Card not present" refers to a type of transaction where the physical credit or debit card is not physically presented to the merchant at the time of the transaction. This typically occurs in online purchases, phone orders, or mail orders.
A Cash Transaction Report (CTR) is a mandatory financial document that financial institutions in the United States must file with the Financial Crimes Enforcement Network (FinCEN) for any cash transaction exceeding $10,000.
The Certified Anti-Money Laundering Specialist (CAMS) is a globally recognized certification for professionals in the financial industry who specialize in detecting and preventing money laundering and financial crimes.
Chargeback fraud, also known as friendly fraud, occurs when a consumer makes a legitimate purchase with their credit card and then disputes the charge with their bank, falsely claiming the transaction was unauthorized or that the goods or services were not received.
The Chief Financial Officer (CFO) is a senior executive responsible for managing the financial actions of a company. This role involves overseeing financial planning, risk management, record-keeping, and financial reporting.
Client Due Diligence (CDD) is a process used by financial institutions and businesses to verify the identity and assess the risk profile of their clients.
Client Lifecycle Management (CLM) refers to the comprehensive approach businesses use to manage and optimize their interactions with clients throughout the entire duration of their relationship. This process encompasses various stages, including client acquisition, onboarding, engagement, retention, and renewal or termination.
CSSF stands for the Commission de Surveillance du Secteur Financier, which is the financial regulatory authority in Luxembourg. It oversees and ensures the stability, transparency, and proper functioning of the financial sector, including banks, investment firms, and other financial institutions.
The Committee on Foreign Affairs (COFA) is a legislative body typically found within governmental structures, such as parliaments or congresses, responsible for overseeing and shaping foreign policy and international relations.
CFSP stands for Common Foreign and Security Policy. It is a key component of the European Union's external action, aimed at promoting international peace and security, democracy, and the rule of law.
The Common Reporting Standard (CRS) is an international framework developed by the Organisation for Economic Co-operation and Development (OECD) to facilitate the automatic exchange of financial account information between participating countries.
A Compliance Officer is a professional responsible for ensuring that an organization adheres to legal standards, regulatory requirements, and internal policies. They develop and implement compliance programs, conduct audits, and provide training to staff to prevent violations.
A Compliance Officer for Legal Practice (COLP) is responsible for ensuring that a law firm complies with all relevant legal and regulatory requirements. The COLP's duties include monitoring the firm’s adherence to professional standards, managing risk, and reporting any serious breaches of compliance to regulatory bodies such as the Solicitors Regulation Authority (SRA).
A conflict of interest occurs when an individual or organization has competing interests or loyalties that could potentially influence their decision-making or actions. This situation often arises when personal, financial, or other considerations have the potential to compromise professional judgment and objectivity.
Continuing Professional Development (CPD) refers to the ongoing process of learning and development that professionals engage in to enhance their skills, knowledge, and competencies throughout their careers.
The Corporate Alternative Minimum Tax (CAMT) is a tax provision designed to ensure that large corporations pay a minimum level of tax, regardless of deductions, credits, or other tax benefits that might otherwise reduce their tax liability.
A Correspondent Bank is a financial institution that provides services on behalf of another bank, typically in a different country. These services can include facilitating wire transfers, conducting business transactions, accepting deposits, and gathering documents. Correspondent banks act as intermediaries, enabling domestic banks to access international financial markets and conduct cross-border transactions efficiently.
Countering the Financing of Terrorism (CFT) refers to the strategies and measures implemented to detect, prevent, and disrupt the financial networks that support terrorist activities.
Counterparty refers to the other party involved in a financial transaction or contract. In the context of trading, investing, or financial agreements, the counterparty is the entity on the opposite side of the deal, such as a buyer if you are selling, or a seller if you are buying.
Credit card fraud is a form of identity theft that involves unauthorized use of someone else's credit card information to make purchases or access funds. This type of fraud can occur through various methods, such as phishing scams, data breaches, or physical theft of the card.
Credit card skimming is a form of theft where criminals use a small device to illegally capture and store the data from the magnetic stripe of a credit card during a legitimate transaction. This device, often discreetly attached to ATMs, gas station pumps, or point-of-sale terminals, allows the thief to clone the card and make unauthorized purchases.
Criminal Law is a branch of law that deals with behaviors and actions that are considered offenses against the state or public, distinguishing them from civil wrongs. It involves the prosecution by the government of a person for an act that has been classified as a crime.
Criminal organizations are structured groups engaged in illegal activities for profit, power, or influence. These entities often operate in a hierarchical manner and may be involved in various illicit activities such as drug trafficking, money laundering, extortion, and human trafficking.
Cross Border Payments refer to financial transactions where the payer and the recipient are located in different countries. These payments can involve individuals, businesses, or financial institutions and typically require currency conversion, compliance with international regulations, and the use of intermediary banks or payment networks.
A Crypto Asset Service Provider (CASP) is an entity or organization that offers services related to cryptocurrencies and digital assets. These services can include the exchange, transfer, custody, or management of crypto assets.
Cryptocurrency fraud refers to illegal activities involving digital currencies, where scammers deceive individuals or organizations to steal funds or sensitive information. Common types include Ponzi schemes, phishing attacks, fake initial coin offerings (ICOs), and pump-and-dump schemes.
Crypto mixers enhance privacy by obscuring the origin of cryptocurrency transactions, but they raise significant regulatory concerns, especially around money laundering. This article explores how crypto mixers work, their risks, regulatory challenges, and the evolving legal landscape surrounding their use.
Cuckoo Smurfing is a sophisticated money laundering technique where illicit funds are disguised as legitimate transactions. This method involves depositing small amounts of dirty money into the bank accounts of unsuspecting individuals or businesses, often through international transfers.
A Currency Transaction Report (CTR) is a mandatory financial document that U.S. financial institutions must file with the Financial Crimes Enforcement Network (FinCEN) for any transaction exceeding $10,000.
A custodial wallet is a type of digital wallet where a third party, such as a cryptocurrency exchange or financial institution, holds and manages the private keys on behalf of the user. This means that the custodian has control over the user's funds and is responsible for securing them.
A custodian is an individual or entity responsible for the care, management, and oversight of assets or property on behalf of another party. This role often involves safeguarding financial assets, maintaining records, and ensuring compliance with relevant regulations. In a broader context, custodians can also refer to individuals responsible for the maintenance and cleanliness of a physical space, such as a building or facility.
The Data Protection Act 2018 (DPA 2018) is a UK law that governs the processing of personal data. It implements the General Data Protection Regulation (GDPR) into UK law, providing a framework for data protection and privacy rights.
Decentralized Finance (DeFi) refers to a financial ecosystem built on blockchain technology that aims to recreate and improve upon traditional financial systems without the need for centralized intermediaries like banks or brokerages.
Decentralized Identifiers (DIDs) are a new type of identifier that enables verifiable, self-sovereign digital identities. Unlike traditional identifiers, such as email addresses or usernames, DIDs are not tied to a centralized registry, authority, or intermediary.
Defence Against Money Laundering refers to the measures and practices implemented by financial institutions, businesses, and regulatory bodies to detect, prevent, and report money laundering activities.
A Deferred Prosecution Agreement (DPA) is a legal arrangement between a prosecutor and a corporation or individual accused of wrongdoing. Under a DPA, the prosecution agrees to grant amnesty or defer prosecution for a specified period, provided the accused meets certain conditions, such as paying fines, implementing compliance measures, or cooperating with ongoing investigations.
The Denied Persons List (DPL) is a roster maintained by the U.S. Department of Commerce that includes individuals and entities who are prohibited from participating in export transactions. These restrictions are typically imposed due to violations of export control regulations, national security concerns, or other legal infractions.
A Designated Premises License (DPL) is a legal authorization required in certain jurisdictions for venues that intend to sell or supply alcohol, provide regulated entertainment, or serve late-night refreshments.
The Digital Operational Resilience Act (DORA) is a regulatory framework established by the European Union aimed at enhancing the digital resilience of financial institutions.
A Double Taxation Agreement (DTA) is a treaty between two or more countries designed to prevent individuals and businesses from being taxed twice on the same income.
Dubai International Financial Centre (DIFC) is a leading global financial hub in the Middle East, Africa, and South Asia (MEASA) region. Established in 2004, it provides a world-class platform for financial institutions and businesses to operate, offering a robust regulatory framework, a common law system, and a tax-friendly environment.
eBAM (electronic Bank Account Management) is a digital solution designed to streamline and automate the management of bank accounts for businesses.
Electronic Data Interchange (EDI) is a standardized method for exchanging business documents and data between organizations in a digital format. It replaces traditional paper-based communication, enabling faster, more accurate, and efficient transactions.
EDIFACT (Electronic Data Interchange for Administration, Commerce, and Transport) is an international standard developed by the United Nations for the electronic exchange of business documents. It facilitates the automated, standardized communication of data between organizations, enhancing efficiency and reducing errors in transactions such as orders, invoices, and shipping notices. EDIFACT is widely used across various industries to streamline operations and improve interoperability in global trade.
Electronic Identification and Verification (EIV) refers to processes or systems used to electronically verify the identity of individuals or entities. These systems typically involve using various data sources, such as government databases, credit bureaus, or other trusted data providers, to confirm a person's identity.
eKYC, or electronic Know Your Customer, is a digital process used by businesses and financial institutions to verify the identity of their clients. This method leverages technology to streamline and automate the traditional KYC procedures, making it faster, more efficient, and secure.
An Electronic Money Institution (EMI) is a financial entity authorized to issue electronic money, which is a digital alternative to cash. EMIs provide services such as electronic payment solutions, digital wallets, and prepaid cards, enabling users to store, transfer, and manage money electronically.
The Electronic Payment Interface (EPI) is a digital platform that facilitates seamless financial transactions between consumers and businesses. It enables the transfer of funds electronically, eliminating the need for physical cash or checks.
An embargo is a government-imposed restriction or ban on trade or the exchange of goods, services, or information with a particular country or entity. It is often used as a political tool to exert pressure or influence, typically in response to political disagreements, human rights violations, or security concerns.
Enhanced Due Diligence (EDD) refers to a rigorous and comprehensive process of investigating and assessing potential risks associated with high-risk customers or transactions.
The Eurasian Group on Combating Money Laundering and Terrorist Financing (EAG) is a regional intergovernmental organization focused on enhancing cooperation and implementing international standards to combat money laundering and the financing of terrorism.
The European Banking Authority (EBA) is a regulatory agency of the European Union established in 2011. Its primary role is to ensure effective and consistent prudential regulation and supervision across the European banking sector.
The European Economic Area (EEA) is a regional trade agreement that extends the European Union's single market to non-EU countries, specifically Iceland, Liechtenstein, and Norway. Established in 1994, the EEA allows these countries to participate in the EU's internal market, enabling the free movement of goods, services, capital, and people.
The European Payments Council (EPC) is a coordination and decision-making body that represents the European banking industry in relation to payments. It is responsible for developing and promoting the Single Euro Payments Area (SEPA), which aims to simplify and harmonize euro transactions across Europe.
Europol, or the European Union Agency for Law Enforcement Cooperation, is an EU agency that assists member states in their fight against serious international crime and terrorism. Established in 1999 and headquartered in The Hague, Netherlands, Europol facilitates information exchange, intelligence analysis, and operational coordination among law enforcement authorities across Europe.
Evasion refers to the act of avoiding or escaping from something, often through cleverness or deceit. It can apply to various contexts, such as evading taxes, eluding capture, or sidestepping questions. Evasion typically involves strategies or tactics to circumvent rules, responsibilities, or confrontations.
Fiat money is a type of currency that is issued by a government and holds value not because it is backed by a physical commodity like gold or silver, but because of the trust and confidence that people have in the issuing authority.
The Financial Action Task Force (FATF) is an intergovernmental organization established in 1989 to develop and promote policies aimed at combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
The Financial Action Task Force Recommendations are a set of international standards aimed at combating money laundering, terrorist financing, and other related threats to the integrity of the global financial system.
The Financial Conduct Authority (FCA) is a regulatory body in the United Kingdom responsible for overseeing the financial services industry. Its primary objectives are to protect consumers, ensure market integrity, and promote effective competition. The FCA regulates financial firms, sets standards for conduct, and enforces compliance to maintain trust and stability in the financial markets.
The Financial Crimes Enforcement Network (FinCEN) is a bureau of the U.S. Department of the Treasury that aims to safeguard the financial system from illicit use, combat money laundering, and promote national security through the collection, analysis, and dissemination of financial intelligence.
A Financial Intelligence Unit (FIU) is a government agency responsible for collecting, analyzing, and disseminating financial information to combat money laundering, terrorist financing, and other financial crimes.
Financially Exposed Persons (FEPs) are individuals who, due to their position or influence, have greater exposure to financial risks, such as corruption, money laundering, or bribery. T
Financial Technology, commonly known as Fintech, refers to the innovative use of technology to deliver financial services and solutions. It encompasses a wide range of applications, including mobile banking, online payment systems, peer-to-peer lending, cryptocurrency, and robo-advisors.
The Foreign Account Tax Compliance Act (FATCA) is a U.S. federal law enacted in 2010 aimed at combating tax evasion by U.S. taxpayers holding financial assets outside the United States.
The Foreign Corrupt Practices Act (FCPA) is a United States federal law enacted in 1977 aimed at preventing bribery and corruption in international business transactions. It prohibits U.S. individuals and entities from offering, paying, or authorizing payments to foreign government officials for the purpose of obtaining or retaining business.
FRAML stands for Fraud Detection, Anti-Money Laundering, and Compliance. It is a comprehensive approach used by financial institutions and businesses to identify, prevent, and manage fraudulent activities and money laundering schemes.
Gatekeepers are individuals or entities that control access to resources, information, or opportunities. They play a crucial role in various fields, such as media, publishing, business, and academia, by determining what content or individuals gain visibility or entry.
The German Money Laundering Act (GwG) is legislation designed to prevent money laundering and terrorism financing in Germany. It requires businesses, financial institutions, and certain professionals to implement measures to detect and report suspicious activities.
Global Financial Services Company (GFSC) is a multinational corporation that provides a wide range of financial products and services to individuals, businesses, and governments worldwide. These services typically include investment banking, asset management, insurance, wealth management, and financial advisory.
Global Payments Innovation (GPI) is a transformative initiative by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) aimed at enhancing the speed, transparency, and traceability of cross-border payments.
A Global Systemically Important Bank (GSIB) is a financial institution whose failure could trigger a widespread economic crisis due to its size, interconnectedness, and significance in the global financial system. These banks are subject to stricter regulatory standards and oversight to mitigate risks and ensure financial stability. The designation is determined by the Financial Stability Board (FSB) and involves criteria such as cross-jurisdictional activity, complexity, and substitutability. GSIBs are required to hold additional capital buffers and adhere to enhanced risk management practices to reduce the likelihood of financial disruptions.
Governance refers to the processes, structures, and systems by which organizations, institutions, or societies are directed, controlled, and held accountable. It encompasses the mechanisms and principles that guide decision-making, ensure transparency, uphold the rule of law, and promote the effective management of resources and responsibilities.
Hawala is an informal value transfer system that operates outside traditional banking networks. It is based on trust and personal connections, allowing individuals to transfer money across borders without the physical movement of cash.
Her Majesty's Revenue and Customs (HMRC) is the United Kingdom's tax authority responsible for collecting taxes, administering various welfare programs, and enforcing compliance with tax laws.
Her Majesty's Treasury (HMT) is the United Kingdom's economic and finance ministry, responsible for developing and executing the government's public finance policy and economic policy. It oversees the management of public revenue and expenditure, aiming to ensure economic stability and growth. HMT plays a crucial role in formulating fiscal policies, managing the national debt, and setting the framework for taxation and public spending.
An identifier is a name used to uniquely distinguish entities within a system, such as variables, functions, or objects in programming. It allows for clear reference and manipulation of these entities within code, databases, or other structured environments.
An Identity Provider (IdP) is a service or system that creates, manages, and verifies digital identities for users. It authenticates users by confirming their credentials, such as usernames and passwords, and provides them with access to various applications and services.
An Independent Review is an objective evaluation conducted by an impartial third party to assess the quality, performance, or compliance of a product, service, process, or organization.
Information sharing refers to the exchange of data, knowledge, or insights between individuals, organizations, or systems. It is a crucial process in various contexts, such as business, education, healthcare, and technology, facilitating collaboration, decision-making, and innovation.
Inherent risk refers to the level of risk that exists in the absence of any controls or mitigating factors. It is the natural level of risk that is present in a process, activity, or environment due to its inherent characteristics.
An Initial Coin Offering (ICO) is a fundraising method used primarily by startups to raise capital for new cryptocurrency projects. In an ICO, a company offers digital tokens or coins to investors in exchange for established cryptocurrencies like Bitcoin or Ethereum, or sometimes fiat currency.
The Institute of Chartered Accountants in England and Wales (ICAEW) is a professional membership organization that provides qualifications and support for chartered accountants. Established in 1880, ICAEW promotes high standards, ethical practices, and continuous professional development within the accounting profession. It offers the prestigious ACA qualification, which is recognized globally, and serves as a leading authority on financial and business issues, influencing policy and regulation.
Insurance Technology, commonly referred to as Insurtech, is the innovative application of technology to enhance and streamline the insurance industry. It involves the use of advanced tools such as artificial intelligence, big data analytics, blockchain, and the Internet of Things (IoT) to improve the efficiency, accuracy, and customer experience of insurance services.
An International Business Company (IBC) is a type of corporate entity commonly used in international trade and investment. It is typically registered in a jurisdiction that offers favorable tax treatment, minimal reporting requirements, and a high degree of confidentiality.
The International Chamber of Commerce (ICC) is a global business organization that represents enterprises of all sizes and sectors from around the world. Founded in 1919, the ICC works to promote international trade, responsible business conduct, and a global approach to regulation through advocacy, standard-setting, and dispute resolution services.
ISO 20022 is an international standard for electronic data interchange between financial institutions. It provides a common platform for developing messages in a standardized format, facilitating efficient communication and interoperability across global financial systems.
The International Traffic in Arms Regulations (ITAR) is a set of United States government regulations that control the export and import of defense-related articles and services. Managed by the U.S. Department of State, ITAR aims to safeguard national security and further U.S. foreign policy objectives by ensuring that defense technology and information do not fall into the hands of foreign adversaries.
Know Your Business (KYB) is a regulatory and compliance process used by companies to verify the identity and legitimacy of other businesses they engage with.
KYCC stands for Know Your Customer's Customer. It is an extension of the traditional Know Your Customer (KYC) process, which involves verifying the identity and assessing the risk of a financial institution's direct clients. KYCC goes a step further by scrutinizing the customers of those clients to ensure compliance with anti-money laundering (AML) regulations and to mitigate risks associated with financial crimes.
KYE, or Know Your Employee, is a process companies use to verify and monitor the identity and background of employees to ensure compliance, security, and mitigate potential risks.
Know Your Supplier is a due diligence process used by businesses to verify and assess the credibility, reliability, and compliance of their suppliers. This process involves gathering and analyzing information about a supplier's financial stability, legal standing, ethical practices, and overall reputation.
KYT, or Know Your Transaction, is a compliance and risk management process used primarily in the financial and cryptocurrency sectors. It involves monitoring and analyzing transactions to detect suspicious activities, prevent fraud, and ensure adherence to regulatory requirements. By leveraging advanced technologies like machine learning and data analytics, KYT helps institutions maintain the integrity of their financial operations and protect against money laundering and other illicit activities.
A Legal Entity Identifier (LEI) is a unique 20-character alphanumeric code used to identify distinct legal entities participating in financial transactions globally.
Legal risk refers to the potential for financial loss or other negative consequences that arise from legal actions, disputes, or non-compliance with laws and regulations. This type of risk can stem from various sources, including changes in legislation, litigation, contractual breaches, or regulatory penalties.
A Limited Liability Partnership (LLP) is a business structure that combines elements of partnerships and corporations. It allows partners to benefit from limited personal liability, meaning they are not personally responsible for the business's debts or liabilities beyond their investment in the LLP.
The Malta Financial Services Authority (MFSA) is the regulatory body responsible for overseeing and ensuring the integrity, stability, and proper functioning of Malta's financial services sector. Established to safeguard the interests of consumers, investors, and the broader economy, the MFSA regulates a wide range of financial activities, including banking, insurance, securities, and investment services.
The Management Expense Ratio (MER) is a financial metric used to assess the cost of managing an investment fund, such as a mutual fund or exchange-traded fund (ETF). It is expressed as a percentage of the fund's average net assets and includes management fees, administrative fees, and other operational expenses.
A Man In The Middle (MITM) attack is a cybersecurity threat where an attacker secretly intercepts and relays communications between two parties who believe they are directly communicating with each other.
The Markets in Crypto-Assets Regulation (MiCA) is a comprehensive regulatory framework developed by the European Union to oversee the cryptocurrency and digital asset markets. It aims to provide legal clarity, enhance consumer protection, and ensure financial stability within the EU by establishing uniform rules for crypto-asset issuers and service providers.
The Markets in Financial Instruments Directive (MiFID) is a regulatory framework established by the European Union to standardize and enhance the transparency and efficiency of financial markets across member states.
The Monetary Authority of Singapore (MAS) is the central bank and financial regulatory authority of Singapore. Established in 1971, MAS is responsible for overseeing the country's monetary policy, managing its official foreign reserves, and ensuring the stability and integrity of its financial system.
A Money Laundering Compliance Officer (MLCO) is a professional responsible for ensuring that a financial institution or organization adheres to legal and regulatory requirements related to preventing money laundering and terrorist financing.
MLR 2017 stands for Money Laundering Regulations 2017, a set of rules designed to prevent money laundering and terrorist financing.
MLRO stands for Money Laundering Reporting Officer. This is a designated role within an organization, typically a financial institution, responsible for overseeing and ensuring compliance with anti-money laundering (AML) regulations. The MLRO's duties include monitoring transactions for suspicious activity, reporting any such activities to the relevant authorities, implementing AML policies and procedures, and providing training to staff on recognizing and preventing money laundering.
Money laundering is the process of making illegally-gained proceeds appear legal.
A money mule is a person who transfers or moves illegally acquired money on behalf of others, often as part of a money laundering scheme. These individuals may be knowingly or unknowingly involved in criminal activities, such as fraud or cybercrime, and are used to obscure the true origin and destination of illicit funds.
A Money Service Business (MSB) is a type of financial institution that provides various money-related services, including currency exchange, money transfers, check cashing, and issuing or redeeming money orders or traveler's checks.
A Money Transfer Operator (MTO) is a financial service provider that facilitates the transfer of funds from one individual or entity to another, often across different countries. These operators offer a secure and efficient way to send money, typically leveraging digital platforms, mobile apps, or physical locations.
The National Crime Agency (NCA) is a UK law enforcement agency responsible for tackling serious and organized crime. It works to protect the public by targeting criminal activities such as drug trafficking, human trafficking, cybercrime, and economic crime. The NCA collaborates with various domestic and international partners to disrupt and dismantle criminal networks, ensuring national security and safety.
A Nominee Director is an individual appointed to the board of a company to represent the interests of a specific stakeholder, such as a shareholder, creditor, or parent company. Unlike regular directors, nominee directors may not have a direct personal stake in the company but are expected to act in the best interests of the party they represent. Their role often involves monitoring the company's activities, ensuring compliance with agreements, and providing strategic input aligned with the interests of the appointing entity.
The Office of Financial Sanctions Implementation (OFSI) is a UK government body responsible for ensuring that financial sanctions are effectively implemented and enforced.
The Office of Foreign Assets Control (OFAC) is a financial intelligence and enforcement agency of the U.S. Department of the Treasury.
The Office of the Superintendent of Financial Institutions (OSFI) is a Canadian federal agency responsible for regulating and supervising financial institutions, including banks, insurance companies, and pension plans.
Offshore Banking Operations (OBO) refer to the management and execution of banking activities conducted outside a customer's home country, typically in jurisdictions with favorable financial regulations, tax benefits, and privacy laws.
An offshore company is a business entity registered in a jurisdiction outside of the country where its primary operations or owners are located. These companies are often established in regions known for favorable tax laws, regulatory environments, and privacy protections.
Open Banking is a financial services model that allows third-party developers to access consumer banking, transaction, and other financial data through the use of application programming interfaces (APIs).
Open Network refers to a type of network architecture that is designed to be accessible, interoperable, and flexible. It allows for seamless integration and communication between different systems and devices, often using open standards and protocols.
An Open Protocol is a set of rules and standards that are publicly available and can be used by anyone to ensure interoperability and communication between different systems and devices. Unlike proprietary protocols, open protocols are not owned by any single entity, allowing for greater collaboration, innovation, and integration across various platforms and technologies.
Open Source Intelligence (OSINT) refers to the process of collecting, analyzing, and utilizing information from publicly available sources to support decision-making and gain insights. This can include data from the internet, social media, news outlets, public records, and other accessible platforms.
Operational risk refers to the potential for losses resulting from inadequate or failed internal processes, people, systems, or external events. This type of risk encompasses a wide range of issues, including human errors, system failures, fraud, and natural disasters, which can disrupt business operations and impact an organization's financial health and reputation.
Pay Link is a digital payment solution that allows businesses and individuals to send and receive payments through a secure, shareable link. This service simplifies transactions by enabling users to generate a unique URL that can be shared via email, text, or social media, facilitating quick and easy payment processing without the need for complex integrations or additional software.
Payment fraud refers to any type of illegal or unauthorized transaction conducted by a cybercriminal or fraudster to steal money or sensitive financial information. This can include activities such as credit card fraud, identity theft, phishing scams, and fraudulent chargebacks.
PISP, or Payment Initiation Service Provider, is a type of financial service that allows third-party providers to initiate payments directly from a user's bank account with their consent. This service is part of the broader framework of Open Banking, which aims to increase competition and innovation in the financial sector by enabling secure and efficient access to banking services.
A Payment Service Provider (PSP) is a third-party company that facilitates online transactions between merchants and customers by providing a secure platform for processing payments. PSPs offer a range of services, including payment gateway integration, fraud detection, and multi-currency support, enabling businesses to accept various payment methods such as credit cards, digital wallets, and bank transfers.
The Payment Services Directive 2 (PSD2) is a European Union regulation that came into effect in January 2018, aimed at enhancing innovation, competition, and security in the financial services sector. It mandates banks to open their payment services and customer data to third-party providers through open APIs, fostering the development of new payment solutions and services.
A Person of Significant Control (PSC) is an individual or entity that holds significant influence or control over a company. This typically includes those who own more than 25% of the company's shares or voting rights, have the power to appoint or remove a majority of the board of directors, or otherwise exercise significant influence or control over the company.
A Politically Exposed Person (PEP) is an individual who holds or has held a prominent public position, such as a government official, senior executive in a state-owned enterprise, or a high-ranking political party member.
A Ponzi scheme is a fraudulent investment scam that promises high returns with little risk to investors. It generates returns for earlier investors using the capital from newer investors, rather than from profit earned by the operation of a legitimate business.
Predicate crime refers to a criminal offense that is a component of a larger, more complex crime, often serving as a basis for further criminal activities. For example, in the context of money laundering, a predicate crime could be drug trafficking, fraud, or embezzlement, which generates the illicit funds that are subsequently laundered. Identifying and prosecuting predicate crimes is crucial for dismantling broader criminal enterprises and preventing further illegal activities.
A Preferential Trade Agreement (PTA) is a trade pact between countries that provides for reduced tariffs or other trade barriers on certain products from the participating nations. Unlike free trade agreements, PTAs do not eliminate all tariffs but offer preferential access to specific goods, fostering increased trade and economic cooperation among the member countries.
Pretty Good Privacy (PGP) is an encryption program that provides cryptographic privacy and authentication for data communication. Developed by Phil Zimmermann in 1991, PGP is used to secure emails, files, and other forms of digital communication by encrypting the content, ensuring that only intended recipients can read it.
A private key is a cryptographic tool used in encryption and decryption processes to ensure secure communication and data protection. It is a secret, randomly generated string of characters that is used in conjunction with a public key in asymmetric encryption systems.
POCA, or Proceeds of Crime Act, is a legislative framework designed to combat money laundering and other financial crimes by allowing authorities to confiscate assets and profits obtained through illegal activities. The act provides law enforcement agencies with the tools to trace, freeze, and seize criminal proceeds, thereby disrupting the financial incentives that drive criminal enterprises.
Proliferation Financing refers to the financial support provided for the development, acquisition, and proliferation of weapons of mass destruction (WMDs) and their delivery systems.
Proliferation financing (PF) refers to the provision of funds or financial services that are used to support the development, acquisition, or proliferation of weapons of mass destruction (WMD) and their delivery systems.
Proof of Address is a document or set of documents used to verify an individual's residential address. Common examples include utility bills, bank statements, lease agreements, or official government correspondence.
Pump and Dump is a fraudulent investment scheme where the price of a stock or cryptocurrency is artificially inflated ("pumped") through false, misleading, or exaggerated statements. Once the price has been driven up, the perpetrators sell off their holdings at the inflated prices, leading to a sharp price decline ("dump"), and leaving other investors with significant losses.
Refund fraud is a deceptive practice where individuals or entities exploit return policies to illegitimately obtain refunds or replacements for goods or services. This can involve returning stolen merchandise, using counterfeit receipts, or manipulating return systems to receive money or products without a valid purchase.
Regulations are official rules or directives made and maintained by an authority to control or govern conduct within a specific area or industry. They are designed to ensure compliance, protect public interests, maintain safety standards, and promote fairness and transparency. Regulations can apply to various sectors, including finance, healthcare, environment, and more, and are enforced by governmental or regulatory bodies.
A regulatory agency is a governmental body responsible for creating, implementing, and enforcing rules and regulations within a specific industry or sector. These agencies ensure compliance with laws, protect public interests, maintain safety standards, and promote fair practices.
Regulatory Technology (RegTech) refers to the use of innovative technology solutions to help businesses comply with regulatory requirements more efficiently and effectively. It encompasses a range of tools and applications designed to streamline compliance processes, manage risk, and ensure adherence to laws and regulations.
Remittance refers to the transfer of money, typically by a foreign worker, to an individual or family in their home country.
The Responsibility to Protect (R2P) is a global political commitment adopted by United Nations member states in 2005 to prevent genocide, war crimes, ethnic cleansing, and crimes against humanity. It is based on the principle that sovereignty is not a privilege, but a responsibility.
Risk and Compliance refers to the strategic approach organizations take to identify, assess, and manage potential risks while ensuring adherence to laws, regulations, and internal policies. This discipline involves implementing frameworks and controls to mitigate risks, prevent legal violations, and promote ethical conduct, thereby safeguarding the organization's assets, reputation, and operational integrity.
The Securities Industry Essentials (SIE) Exam is an entry-level assessment administered by the Financial Industry Regulatory Authority (FINRA) for prospective securities industry professionals.
A self-hosted wallet is a type of crypto wallet where users maintain full control over their private keys and digital assets, without relying on a third party.
The Serious Fraud Office (SFO) is a specialized government agency in the United Kingdom responsible for investigating and prosecuting complex cases of serious or high-value fraud, bribery, and corruption.
A Service Level Agreement (SLA) is a formal contract between a service provider and a client that outlines the expected level of service, performance metrics, and responsibilities.
Simplified Due Diligence (SDD) is a risk-based approach in compliance procedures where reduced levels of scrutiny are applied to customers or transactions that are considered low risk. SDD allows for less rigorous verification processes compared to standard due diligence, while still ensuring compliance with regulatory requirements.
The Solicitors Regulation Authority (SRA) is the regulatory body responsible for overseeing solicitors and law firms in England and Wales. It sets professional standards, enforces compliance with legal and ethical obligations, and ensures the protection of clients and the public.
Source of Funds refers to the origin of the money used in a financial transaction or investment. It is a critical concept in finance and compliance, particularly in the context of anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
Source of Wealth (SOW) refers to the origin of an individual's or entity's accumulated financial resources. It encompasses the activities, investments, or transactions that have contributed to the growth of their wealth over time. Understanding the SOW is crucial in financial and legal contexts, particularly for compliance with regulations related to anti-money laundering and financial transparency.
A State-Owned Enterprise (SOE) is a business entity that is owned and operated by a government. These enterprises are established to undertake commercial activities on behalf of the government and can be found in various sectors such as energy, transportation, and telecommunications.
A Suspicious Activity Report (SAR) is a document that financial institutions and certain businesses are required to file with government authorities to report any observed or suspected activities that might indicate money laundering, fraud, or other financial crimes.
Suspicious Incident Reports (SIPs) are formal documents used to record and communicate details about activities or behaviors that appear unusual or potentially indicative of criminal or harmful intent. These reports are typically filed by individuals or organizations, such as security personnel, law enforcement, or employees, who observe suspicious actions that may require further investigation.
The Swiss Financial Market Supervisory Authority (FINMA) is the independent regulatory body responsible for overseeing and regulating Switzerland's financial markets. Its primary role is to ensure the stability, integrity, and transparency of the financial system, protect investors, and maintain the country's reputation as a global financial hub.
The Terrorism Act (TACT) refers to a series of legislative measures enacted in the United Kingdom aimed at preventing and responding to acts of terrorism. These laws provide the legal framework for defining terrorism, proscribing terrorist organizations, and granting law enforcement agencies powers to investigate, detain, and prosecute individuals suspected of terrorist activities.
Ultimate beneficial owner (UBO) refers to the individual or entity that ultimately owns or controls a company or asset, even if the ownership is exercised through a chain of intermediary entities or legal structures.
The Ultimate Beneficial Owner (UBO) refers to the individual(s) who ultimately own or control a company or legal entity, either directly or indirectly. The UBO is the person who benefits from or has significant influence over the entity, typically holding a certain percentage of ownership or voting rights (commonly 25% or more).
VASPs, or Virtual Asset Service Providers, are entities that facilitate the exchange, transfer, and custody of virtual assets such as cryptocurrencies. They play a crucial role in the digital financial ecosystem by offering services like trading platforms, digital wallets, and payment processing. VASPs are subject to regulatory frameworks to ensure compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) measures, thereby promoting transparency and security in the virtual asset market.
An xPub (Extended Public Key) is a type of cryptographic key used in hierarchical deterministic (HD) wallets for cryptocurrencies like Bitcoin. It allows users to generate an unlimited number of public addresses from a single master key, facilitating easier management of multiple addresses without compromising security. xPubs are particularly useful for businesses and services that need to track multiple transactions and balances without exposing their private keys.
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