As part of the European Union’s broader anti-money laundering and countering the financing of terrorism (AML/CFT) package, Regulation (EU) 2024/1624 introduces a more harmonized framework for obliged entities across the EU. The regulation brings central securities depositories (CSDs) within the scope of the EU’s AML/CFT obligations and will apply from 10 July 2027.
For Nasdaq CSD, this represents an important extension of the regulatory framework governing its activities. Nasdaq CSD is preparing to implement the relevant requirements across its operations in Estonia, Latvia, Lithuania, and Iceland.
The new framework introduces comprehensive, risk-based AML/CFT requirements, including customer due diligence for direct business relationships, customer risk assessment, identification and verification of customers and beneficial owners, and assessment of the purpose and nature of business relationships. It also requires enhanced measures for higher-risk relationships, including those involving politically exposed persons or higher-risk jurisdictions, together with ongoing monitoring of business relationships and relevant transactions.
The framework also strengthens requirements relating to AML governance and compliance responsibilities, business-wide risk assessments, internal policies and controls, reporting of suspicious activity, record keeping, employee training, and regular reviews and audits.
For relevant direct customer relationships, such as issuers and participants, implementation may therefore result in requests for additional or updated information and documentation, as well as periodic reviews and ongoing monitoring. The precise scope and handling of these requirements will reflect the regulation, supporting technical standards and guidance, and the risk profile of the individual business relationship.
Implementing the new AML/CFT requirements will require considerable effort and ongoing investment across Nasdaq CSD’s Baltic markets. These additional regulatory requirements and associated operational responsibilities are therefore among the factors considered as part of the broader review of issuer fees.
