Compliance Glossary
91 regulatory and compliance terms explained for financial services professionals. Each term includes regulatory context, related concepts, and links to recent updates.
A
The EU directive regulating managers of alternative investment funds, including hedge funds, private equity funds, re...
The set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds a...
Alternative name for the EU Money Laundering Directives, commonly referenced as AMLD4, AMLD5, or AMLD6. Each iteratio...
The assessment firms must conduct for non-advised services involving complex financial instruments, to determine whet...
A firm authorised to manage investment portfolios on behalf of clients, including institutional investors and retail ...
B
A resolution tool that allows authorities to write down or convert the liabilities of a failing bank to absorb losses...
A financial institution authorised to accept deposits and extend credit, subject to the most comprehensive regulatory...
The comprehensive set of reform measures developed by the Basel Committee on Banking Supervision (BCBS) to strengthen...
The process of creating systems of prevention and recovery to deal with potential threats to a firm's operations. In ...
The obligation for investment firms to take all sufficient steps to obtain the best possible result for their clients...
The EU regulation establishing a framework for the governance, integrity, and reliability of benchmarks used in finan...
A firm that engages in the business of buying and selling securities for its own account (dealing) or on behalf of cl...
C
The FCA rules governing how firms safeguard client money and custody assets. CASS requires firms to segregate client ...
The process financial institutions use to collect and evaluate information about a customer to assess the risk they p...
The use of cloud computing services by regulated financial institutions, which is treated as a form of outsourcing su...
The risk that a firm's behaviour, products, or services will result in poor outcomes for customers, damage to market ...
The FCA's flagship conduct regime requiring firms to act to deliver good outcomes for retail customers across four ke...
The EU directive implementing the Basel framework for banks and investment firms, covering requirements for authorisa...
The directly applicable EU regulation establishing detailed prudential requirements for credit institutions and inves...
A platform that facilitates the buying, selling, and trading of crypto-assets. Under emerging regulatory frameworks s...
The EU directive requiring large companies and listed SMEs to report on sustainability matters using the European Sus...
D
Landmark US financial regulation enacted in 2010 in response to the 2008 financial crisis. Dodd-Frank introduced swee...
An EU regulation establishing a comprehensive framework for digital operational resilience in the financial sector. D...
E
Additional due diligence measures applied to higher-risk customers, transactions, or business relationships. EDD typi...
The EU regulation establishing requirements for OTC derivative contracts, central counterparties (CCPs), and trade re...
A determination by one jurisdiction that another jurisdiction's regulatory and supervisory framework achieves outcome...
The three central pillars used to evaluate a company's or investment's sustainability and ethical impact. Environment...
F
The inter-governmental body that sets international standards for combating money laundering, terrorist financing, an...
A company that uses technology to deliver financial services in innovative ways, including digital payments, peer-to-...
The assessment regulators conduct to determine whether individuals holding key positions in regulated firms possess t...
The illegal practice of executing orders in a financial instrument for one's own account ahead of a known pending cli...
The Basel Committee's comprehensive reform of market risk capital requirements, replacing the previous standardised a...
G
H
I
The process through which a bank assesses and maintains adequate capital in relation to its risk profile, strategy, a...
The EU directive establishing rules for the distribution of insurance and reinsurance products, replacing the earlier...
Fees, commissions, or non-monetary benefits paid or provided to or by investment firms in connection with investment ...
The offence of dealing in financial instruments while in possession of inside information, or encouraging another per...
A firm authorised to underwrite insurance or reinsurance risks, subject to prudential requirements under Solvency II ...
The risk arising from changes in interest rates that affect the economic value and net interest income of a bank's ba...
A 12-character alphanumeric code that uniquely identifies a specific securities issue internationally. ISINs are used...
K
L
A Basel III liquidity standard requiring banks to hold sufficient high-quality liquid assets (HQLA) to cover their to...
A 20-character alphanumeric code that uniquely identifies legally distinct entities participating in financial transa...
The formerly widely used benchmark interest rate at which major global banks lend to one another in the international...
M
The predecessor EU directive to MAR that established the initial framework for prohibiting insider dealing and market...
The EU regulation establishing a comprehensive framework to combat market abuse, including insider dealing, unlawful ...
Unlawful behaviour in financial markets that undermines market integrity and investor confidence. Market abuse encomp...
The EU regulation establishing a comprehensive regulatory framework for crypto-assets that are not covered by existin...
The EU legislative framework governing investment services and activities across the European Economic Area. MiFID II...
The directly applicable EU regulation that complements MiFID II, establishing requirements for pre- and post-trade tr...
The series of EU directives establishing the legal framework for preventing the use of the financial system for money...
The EU requirement for banks to maintain sufficient instruments that can absorb losses and recapitalise the instituti...
N
The EU directive establishing cybersecurity requirements for essential and important entities, including financial se...
A Basel III liquidity standard requiring banks to maintain a stable funding profile in relation to their assets and o...
O
The ability of a firm, and the financial sector as a whole, to prevent, adapt to, respond to, recover from, and learn...
Arrangements where a regulated firm engages a third party to perform a function, service, or activity that would othe...
P
The mechanism that allows a financial services firm authorised in one EU/EEA member state to provide services or esta...
A firm authorised to provide payment services including payment execution, money remittance, payment initiation, and ...
An individual who holds or has held a prominent public function, such as a head of state, senior politician, or senio...
The first pillar of the Basel framework establishing minimum capital requirements for credit risk, market risk, and o...
The second pillar of the Basel framework covering the supervisory review process. Pillar 2 requires banks to conduct ...
The third pillar of the Basel framework requiring banks to publicly disclose information about their risk exposures, ...
The EU regulation requiring manufacturers and distributors of packaged retail investment products and insurance-based...
The regulatory framework requiring manufacturers and distributors of financial products to implement processes for pr...
The EU directive regulating payment services and payment service providers, introducing requirements for strong custo...
R
Technology solutions that help financial institutions meet regulatory requirements more efficiently and effectively. ...
A framework set up by a regulator that allows fintech startups and other innovators to conduct live experiments in a ...
The alternative benchmark rates adopted to replace LIBOR and other IBORs, based on actual overnight transactions rath...
The regulatory requirement for large banking groups to separate their core retail banking activities from their whole...
A measure used to determine the minimum amount of capital that a bank must hold based on the riskiness of its assets....
S
A report filed by a financial institution with the relevant financial intelligence unit (FIU) when it suspects that a...
Reduced due diligence measures permitted for lower-risk customers and products where the risk of money laundering or ...
The EU regulation requiring financial market participants and financial advisers to make sustainability-related discl...
The UK regulatory framework that aims to improve accountability in financial services by requiring firms to allocate ...
The EU directive establishing a risk-based framework for the regulation and supervision of insurance and reinsurance ...
US federal legislation enacted in 2002 to protect investors from fraudulent financial reporting by corporations. SOX ...
The process by which supervisors assess a firm's business model viability, internal governance, risks to capital, and...
A report submitted to authorities when a financial institution identifies a transaction that gives rise to suspicion ...
The assessment firms must conduct when providing investment advice or portfolio management to ensure that recommendat...
Technology solutions used by regulators and supervisory authorities to enhance their oversight capabilities. SupTech ...
T
A UK regulatory principle requiring firms to demonstrate that they deliver fair outcomes for consumers throughout the...
The regulatory framework governing how firms from countries outside a given regulatory perimeter (e.g., non-EU firms)...
The FSB standard requiring global systemically important banks (G-SIBs) to maintain sufficient loss-absorbing and rec...
The framework and processes used by firms to identify, assess, monitor, and mitigate risks arising from relationships...
The systems, processes, and controls used by firms and regulators to monitor trading activity for potential market ab...
The regulatory requirement for investment firms and trading venues to report details of transactions in financial ins...
U
V
The US regulation prohibiting banking entities from engaging in proprietary trading and from acquiring or retaining o...
Customers who, due to their personal circumstances, are especially susceptible to harm, particularly when a firm is n...