The FCA seeks to expand the scope of financial crime reporting requirements
The FCA is considering extending the scope of its annual financial crime reporting obligation to include firms that carry on regulated activities that potentially pose a higher money laundering risk.
The FCA’ s annual financial crime reporting obligation shows the potential money laundering risk faced by a firm, based on its regulated activities and the nature of its customers. The obligation is set out in the FCA Handbook SUP 16.23, Annual Financial Crime Report (REP-CRIM). When the FCA introduced it, the FCA committed to consulting on any future policy change and providing a cost benefit analysis.
The FCA currently assess whether REP-CRIM applies by looking at firm type, e.g. banks, building societies and mortgage lenders and activity type, e.g. intermediaries, e-money institutions and consumer credit firms.
Approximately 2,500 of the 23,000 firms the FCA supervise under The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) (as amended) submit annual REP-CRIM information.
The FCA proposes extending its requirements to include firms that carry on regulated activities that the FCA considers potentially pose a higher money laundering risk. This extension will be irrespective of a firm’s revenue threshold.
This consultation is relevant to firms or businesses that the FCA supervise under the MLRs.
The Consultation Paper is open for comment until 23 November 2020.