Fatshimetrie, a platform dedicated to financial news, recently reported the remarks of the Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, at the Compliance Summit 2024 organized by the Capital Market Institute of Nigeria. The event was themed “Navigating Regulatory Challenges: Aligning with the Changing FATF Standards in the Age of Virtual Asset Service Providers”. A major concern raised by Dr. Agama is the adaptation of capital market players to regulatory frameworks in order to remain compliant with the evolving standards of the Financial Action Task Force (FATF).
The FATF, through its guidelines, helps countries put in place effective regulations to address the risks associated with virtual assets. With the rise of virtual assets, it is crucial to address the regulatory challenges in this area by being proactive in adopting the FATF standards. Dr. Agama highlighted the importance of collaboration between regulators, Virtual Asset Service Providers (VASPs) and market participants for effective implementation of the FATF standards.
The SEC Director General highlighted the collective commitment of stakeholders to ensure that the Nigerian capital market remains at the forefront of global financial integrity and efficiency, while fostering an environment conducive to progress and innovation. The summit was seen as a vital platform for all stakeholders – regulators, operators, financial institutions and technology innovators – to collaborate, share knowledge and jointly define desired future directions.
Recent changes in the FATF standards have a significant impact on virtual asset service providers. Key updates include: the expansion of the definition of VASPs to include custodial wallet providers, exchanges and peer-to-peer platforms; the introduction of the Information Transfer Rule requiring VASPs to share customer information during transactions to enhance transparency; the requirement for VASPs to register and obtain licenses to ensure accountability; and the strengthening of AML/CFT measures to combat money laundering and terrorist financing.
In conclusion, it is imperative for capital market participants to adapt to the ever-evolving FATF regulatory standards in order to preserve market integrity and contribute to the stability of the national and global financial system. Commitment, collaboration and anticipation of future challenges are essential to ensure effective and sustainable compliance in this rapidly evolving field.