On 21 February 2020, the Financial Markets Law Committee (FMLC) published its response on two particular aspects of HM Treasury’s and HM Revenue and Custom’s joint consultation on the Fifth Money Laundering Directive (5MLD) – trusts in financial markets and legal entity identifiers (LEIs).
The FMLC notes that questions 1 and 2 of the joint consultation focus on the requirement in 5MLD that express trusts are registered. It also notes that HM Treasury has provided exemptions from these requirements in relation to loans and bond transactions. The FMLC urges HM Treasury to consider further exemptions in the clearing, securities settlement and payment systems space where express trusts are used as legitimate and efficient legal devices designed to reduce systemic and other risks.
Although the consultation does not specifically address the question of LEIs, the FMLC briefly brings to HM Treasury’s attention their importance in the context of the expansion of the anti-money laundering regulatory regime to cover virtual currencies.