While we would like to wish you a great start to the year, we are sharing that on December 22, 2025, the FIAU has published a new document titled Application of Simplified Due Diligence by Collective Investment Schemes.
During Q4 2023, the FIAU, together with the MFSA, carried out a thematic review of Collective Investment Schemes (CISs) focusing on customers engaged in relevant financial business: whether investing for themselves or on behalf of underlying investors.
The review identified recurring gaps in documenting Customer Risk Assessments (CRA) and transaction monitoring. Effective monitoring requires comparing transactional behaviour against a well-defined and dynamic customer profile. CISs should avoid assuming that large transactions are self-explanatory or that smaller ones are automatically low risk.
Key takeaways:
- Understand your customer’s business and risk profile
- Avoid “tick-box” approaches
- Not all regulated entities are low risk by default
- SDD is not an exemption from CDD
- Ongoing monitoring remains essential
- Policies must be tailored to Maltese Law
The FIAU recommends strengthening risk assessment and ongoing monitoring procedures to ensure higher-risk indicators are not overlooked simply because Simplified Due Diligence (SDD) is applied. CISs are also urged to stay updated on changes impacting AML/CFT obligations, especially those linked to the upcoming AML Package.
The full document can be accessed here:
Publication of thematic review: Application of Simplified Due Diligence by Collective Investment Schemes – FIAU
