This article was first published in EFAMA's Fact Book 2026.
The new AML (Anti-Money Laundering) framework aims at creating a stronger and more harmonised response to money laundering and terrorist financing threats across the EU. Few would disagree with this noble goal, which will help secure our financial system against exploitation by malicious actors. However, as is often the case, the devil lies in the technical details, which in this case can have far-reaching implications for the asset management industry.
But let’s start from the beginning…
Within the broader financial industry ecosystem, the asset management industry operates based on significantly different parameters than, for example, the banking industry. When units/shares of investment funds are sold to investors, both retail and professional, the money they give in return is transferred from their bank accounts. This means that before any relationship is established between the investor and the investment fund or asset manager, the customer and his capital have already been analysed for anti-money laundering purposes by another obliged entity, the bank.
Moreover, different distribution models were developed across Member States and outside the EU to make EU investment funds, and among them UCITS in particular, widely accessible to investors. In many cases, these involve regulated intermediaries such as banks, investment firms, brokers or independent financial advisors. These intermediaries purchase units/shares in their own name, but on behalf of their clients, meaning that no direct relationship is established between the fund/asset manager and the underlying investor. In countries such as Sweden, Denmark and Finland, structures similar to stock exchanges were also set up for funds. They distribute funds in a similar fashion to how ETFs are traded on regulated exchanges. In some other Member States, intermediaries act more as distributors.
What is key is that through this varied distribution landscape, funds are accessible to a wide range of investors, including those from third countries. On the investors’ side, this makes a diversity of investment options available, helping them to start their investor journey and find a suitable solution to their various needs. On the broader EU side, vast resources are channelled to the EU real economy, including those coming from non-EU investors. At the same time, as intermediaries are AML obliged entities themselves, and money enters the fund ecosystem through investors’ bank accounts, the ML/TF risk in the fund sector is properly mitigated.
How could this be affected by the new AML approach?
These significant differences from the reality of the banking sector seemed never to be fully understood from an AML perspective. So was the diversified landscape of fund distribution. This became fully apparent now that we are aiming for a more harmonised AML approach that requires the same rules to be applied across all Member States, irrespective of how their fund industry operates. Among them, the requirement that investment funds would apply customer due diligence obligations to their intermediaries' client bases poses a real threat to current distribution systems.
Not only are asset managers not in possession of such data, but intermediaries would also be unable to share it. This is due to data protection and professional secrecy obligations in the EU, in particular Member States, and in third countries, as well as the commercial value of such information. Any attempt to enforce such a “look-through” would lead intermediaries to reduce the number of funds they distribute, therefore limiting the diversity of investment solutions available to retail investors. In the Nordic Member States, this could also lead to the total collapse of these well-functioning systems. Outside the EU, EU funds would find it much harder to compete successfully in an increasingly challenging international landscape, risking UCITS losing its position as a global gold standard. An attempt to exercise CDD obligations directly on underlying investors would be duplicative, prolonging their onboarding process and likely discouraging retail investors from participating in financial products.
It is therefore of utmost importance that this reality is fully recognised by AMLA, and that relief is provided to the asset management industry from duplicative CDD obligations. Otherwise, there is a high probability that established distribution channels of funds might be severely affected. This would happen at a time when strengthening the EU financial industry’s position on the global stage is both a crucial objective and a necessity, and we strive for increased retail investor participation in financing the economy alongside the achievement of the Savings and Investments Union.
Author: Zuzanna Bogusz
