FCA Annual Financial Crime Reporting (REP-CRIM)
Firms subject to Money Laundering Regulations (with a few exceptions) must undertake and submit an annual financial crime report to the FCA. Known as REP-CRIM, this requirement has been in place for many firms since 2016 under Sup 16.23. However, the regulator’s recent PS21/4 update has bought an estimated 4500 additional firms into the scope of REP-CRIM.
The report itself can be found at Sup 16 Annex.
REP-CRIM – Impact on firms
REP-CRIM returns are an important way for the FCA to gather data to tackle money laundering more effectively. However, firms have struggled to comply over the years. They have faced challenges including simply lacking the required data, or holding it and being unable to “cut and dice” it in a manner suitable for meeting REP-CRIM reporting requirements.
Firms should also remember that their regulatory supervision regime can be increased or decreased in frequency dependent on their sector and the level of comfort that the FCA can take from returns such as these.
Who is affected?
As outlined in PS21/4, the following firms will have to submit an annual Rep-Crim return as of 30/03/2022:
- Certain FSMA authorised firms falling within the scope of the MLRs which either:
- hold client money or assets (ie holding under FCA Handbook CASS 5, 6 or 7), or
- carry on an activity that we consider poses higher money laundering risk. (for eg dealings in investments as agents and managing investments). These are set out in a table under 16.23 in Appendix 1 of PS21/4.
- All payments institutions except for payment institutions that only carry on at least one of the following payment services:
- Money remittance (these firms are supervised by HMRC for anti-money laundering (AML) purposes);
- Account information services and/or payment initiation services. These firms do not receive or hold clients’ money and do not carry out payment transactions, and so pose a lower AML risk;
- A person with temporary PI authorisation that immediately before IP completion day was providing payment services other than through a branch in the UK or a UK-based agent (as defined in the FCA handbook), as per revision to instrument.
- All electronic money institutions.
- All Multilateral Trading Facilities (MTFs).
- All Organised Trading Facilities (OTFs).
- OTFs are a type of firm introduced by MiFID II, and therefore are being brought into scope of the REP-CRIM obligations and updating FCA rules.
- All cryptoasset exchange providers and custodian wallet providers
How Complyport help?
If you are submitting your Rep-Crim return for the first time, or you have submitted them before but would like more insight into how the FCA may react to your return, get in touch with our Financial Crime and Forensics team today. Our team will review and provide you with constructive feedback as to how well your return may withstand the regulatory scrutiny that it is about to receive.
Please fill in the form below to book a free consultation with a member of our team.