CySEC Initiates Consultation on Using Regtech for Identity Verification

The Cyprus Securities and Exchange Commission​ (CySEC) has recently launched a consultation on the use of regtech in “AML/KYC” – obligatory identity verification in the framework of anti-money-laundering regulations.

The consultation is to propose the amendment of the provisions of Annex IV of CySEC’s Directive 144-2007-08 on The Prevention of Money Laundering and Terrorist Financing (‘the CySEC AMLD’) as regards customer due diligence (CDD), by means of innovative technological methods.

The proposed amendment applies to those obliged entities, within the meaning of the AML Law, which fall under CySEC’s supervision.

According to the paper, CySEC initiated this based on three facts:

• The significant technological progress that has been achieved in this field6 which was further confirmed in the context of the work undertaken by the CySEC Innovation Hub.

• The number of non-face to face (NFTF) customers is expected to rise significantly given the circumstances caused by the COVID-19 pandemic and the changes it brought.

• The relevant provisions in the CySEC AMLD are currently limited as to the use of Innovative Methods in the field of CDD regarding NFTF identification and verification of identity of natural persons.

CySEC requires that interested parties should submit their responses to the CySEC Policy Department by email at policy@cysec.gov.cy no later than 20 November 2020.

For the full consultation paper, please click here CP-02-2020 (“IMPROVING THE FACILITATION OF CUSTOMER DUE DILIGENCE WITH INNOVATIVE TECHNOLOGIES”).