On 10 October 2019, the Joint Money Laundering Steering Group (JMLSG) announced that HM Treasury had approved the revised guidance on syndicated lending set out in Part II, Chapter 17 of the JMLSG guidance.
The amendments to the JMLSG guidance clarify that market participants entering into a syndicated loan transaction, whether in the capacity of arranger, agent, lender (in the primary market) or seller, buyer, grantor or participant (in the secondary market) must also take into account the money laundering (ML) and terrorist financing (TF) risks.
The guidance also emphasizes the low risk nature of ML and TF particularly in the secondary syndicated loan markets, for instance, given that the majority of the participants are regulated parties and regular market participants (and they are not individuals or retail investors) with long-term and well-established relationships with their counterparts. It also states that the extent of the customer due diligence will depend on the circumstances of the particular transaction.
The Loan Market Association has also published associated FAQs on the JMLSG guidance.