ISDA Responds to AMLA on Customer Due Diligence Under AMLR

Why It Matters

Aligning address verification rules reduces compliance friction for banks and asset managers, strengthening the effectiveness of AML controls across the financial sector.

Key Takeaways

• ISDA backs AFME's stance on AMLR draft RTS
• Identifies address inconsistency for senior vs. junior officials
• Proposes amendment to Article 16 to harmonize verification
• Aims to simplify due‑diligence for financial firms
• Consultation response submitted May 7, 2026

Pulse Analysis

The Anti‑Money Laundering Regulation (AMLR) has become a cornerstone of Europe’s fight against illicit finance, and the draft regulatory technical standards (RTS) shape how firms collect and verify customer information. ISDA, as the global trade association for derivatives markets, wields significant influence in shaping these standards. By engaging early in the AMLA consultation, ISDA signals to regulators that practical, market‑driven perspectives are essential for rules that will affect thousands of counterparties worldwide.

A key friction point highlighted by ISDA is the asymmetry in address verification requirements. The draft RTS allows a senior managing official’s registered office address to stand in for a personal residential address, yet it obliges less‑senior employees—such as authorized signatories—to provide full residential details. This creates an operational paradox: firms must gather more granular data from junior staff while accepting a corporate proxy for senior leaders. ISDA’s proposed amendment to Article 16 seeks to standardize the verification process, reducing data‑collection burdens and minimizing the risk of inconsistent compliance practices.

If adopted, the amendment could streamline AML onboarding for banks, asset managers, and clearing houses, fostering a more uniform due‑diligence landscape. Consistent rules lower costs, accelerate client onboarding, and improve the quality of risk data fed into monitoring systems. Moreover, ISDA’s alignment with AFME underscores a coordinated industry front, potentially accelerating regulatory acceptance and setting a precedent for future harmonization efforts across jurisdictions.