These draft Guidelines aim at further harmonising institutions’ internal governance arrangements, processes, and mechanisms across the EU, in line with the new requirements in this area introduced in the fifth Capital Requirements Directive (CRD V) and the Investment Firms Directive (IFD) and also taking into account the proportionality principle.
The Guidelines clarify that identifying, managing, and mitigating money laundering and financing of terrorism risk is part of sound internal governance arrangements. They also further reinforce the framework regarding loans to members of the management body and their related parties as a specific source of actual or potential conflict of interest. They remind the need for an independent internal audit function, the duties of the audit committee, and the risk committee.
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