Financial crime: Why are securities markets vulnerable?

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Abstract: In the last five years, regulators have begun to focus on compliance and money laundering risks specific to securities markets. It is clear to them that the ways in which securities are issued, traded, cleared and settled create a series of opportunities for criminals and that these opportunities make the securities industry vulnerable to financial crime. This paper explains where the vulnerabilities lie in securities markets, explores the regulatory and financial consequences for individual firms of failing to address these vulnerabilities, identifies guides to action and obstacles to effective compliance and discusses how they can be overcome at affordable cost.

Keywords: securities; due diligence; AML; compliance; capital markets; ISSA; FATF

Jonathan Ehrenfeld is the Head of Securities Markets & FX at SWIFT. He joined SWIFT in 2011 to lead the development of SWIFT’s educational programme for the post-trade market reforms in France and Spain. Jonathan has more than eight years of experience in information management and architecture, data management and financial standards. Before joining SWIFT he was an assistant professor at the Université Libre de Bruxelles. Jonathan has a master’s degree in information science and communication technologies.