In a decisive policy shift announced in October 2025, HM Treasury confirmed that the FCA will become the Single Professional Services Supervisor (“SPSS”) for the United Kingdom’s Anti-Money Laundering and Counter-Terrorism Financing (“AML”/ “CTF”) framework. This significant reform follows extensive consultation and marks a critical step in simplifying the UK’s fragmented supervisory landscape, strengthening enforcement and ensuring greater consistency across the professional services sector.
A Single Supervisor for Professional Services
As outlined in Chapter 2 of the Government’s Consultation Response, the FCA will assume responsibility for supervising all professional services firms within the scope of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLRs”). This includes Legal Service Providers (“LSPs”), Accountancy Service Providers (“ASPs”) and Trust or Company Service Providers (“TCSPs”), covering approximately 60,000 firms.
At present, these firms are regulated by a fragmented network of 22 private Professional Body Supervisors (“PBSs”) and HMRC. Under the new framework, the FCA will unify supervision, bringing professional services oversight into alignment with other sectors already supervised by public authorities such as the Gambling Commission and the FCA itself for financial institutions.
The reform aims to replace the current complex and inconsistent system with a single, risk-based supervisory model that enhances the UK’s resilience to financial crime while ensuring proportionality for low-risk firms.
Implementation and Transition
The new supervisory framework will come into force following the passage of enabling legislation and confirmation of funding arrangements. HM Treasury is working closely with the FCA to develop a detailed transition and delivery plan to ensure a smooth transfer of responsibilities. The FCA’s commencement date will depend on the availability of parliamentary time but preparatory work is already under way, including a forthcoming consultation expected in November 2025 on the FCA’s specific powers and accountability mechanisms under its expanded mandate.
During the transition the FCA will collaborate with existing PBSs, HMRC and the Office for Professional Body Anti-Money Laundering Supervision (“OPBAS”) to maintain high supervisory standards. Once the FCA assumes full responsibility, OPBAS will be wound down as its oversight role will no longer be necessary under a unified system. PBSs will continue to fulfil their broader professional and regulatory functions such as maintaining ethical and conduct standards for their members.
The Rationale Behind the Decision
HM Treasury’s rationale for selecting the SPSS model rests on three core principles: effectiveness, consistency and feasibility.
- A Unified Public-Sector Approach
The government believes that AML/CTF supervision is ultimately a function of the state requiring consistent public oversight. By integrating professional services under the FCA’s remit, supervision will be aligned with the broader UK regulatory framework, providing a uniform, simplified supervisory approach.
- A Risk-Based, Proportionate Model
Overseeing approximately 60,000 regulated entities, the FCA will implement a data-driven, risk-based strategy. This will allow the FCA to focus supervisory resources on higher-risk entities, such as those in the legal, accountancy, and company formation sectors. Meanwhile, firms deemed lower risk will benefit from proportionate regulatory engagement, in line with the Government’s broader aim to reduce unnecessary burdens on business.
- Sector-Specific Expertise
Acknowledging the diversity of professional services, HM Treasury has committed to ensuring that the FCA develops sector-specific expertise. This includes teams with knowledge of legal privilege and the distinct legal systems of England and Wales, Scotland and Northern Ireland. This approach aims to maintain effective supervision that is sensitive to sector-specific nuances.
- Strong Enforcement and Deterrence
With a robust enforcement record, the FCA is well-placed to take decisive action against firms that breach AML/CTF obligations. The forthcoming legislation will equip the FCA with clearly defined enforcement powers, ensuring consistent application and restoring confidence in the integrity of professional services supervision.
- Improved System Coordination
A single public-sector supervisor will strengthen collaboration with law enforcement and intelligence agencies, improving information sharing and cross-agency coordination. This unified approach is expected to produce more effective outcomes in complex investigations involving multiple professional sectors.
- Alignment with Broader Economic Crime Reforms
The SPSS model complements major government initiatives such as the Economic Crime Plan 2023–2026, the forthcoming Anti-Corruption Strategy and the Cross-System Professional Enablers Strategy. It also supports reforms to Companies House, particularly around trust and company service provider oversight, a key area in tackling corporate misuse for money laundering purposes.
Managing the Transition
To avoid disrupting ongoing compliance activities, HM Treasury and the FCA will adopt a phased approach. Firms already compliant with the MLRs will not need to overhaul their AML/CTF frameworks. However, they should anticipate changes to reporting structures, the introduction of digital processes, and revised fee arrangements under FCA supervision.
PBSs will continue to play a vital role throughout the transition. Their sectoral knowledge and relationships will help facilitate knowledge transfer to the FCA and support affected firms. HM Treasury has publicly acknowledged the contributions made by PBSs and OPBAS in strengthening the UK’s AML/CTF framework to date.
What This Means for Firms
This reform represents one of the most significant developments in the UK’s AML/CTF landscape in over a decade. By consolidating supervisory responsibility under the FCA, the Government is creating a simpler, more robust, and more accountable regulatory framework. It is designed to prioritise risk, foster effective cross-sector collaboration and uphold the UK’s global reputation for financial transparency and integrity.
As the legislative process unfolds and the FCA prepares to assume its new responsibilities, professional services firms are encouraged to engage proactively with consultations and transition plans. A collaborative effort between industry, government and regulators will be critical in shaping a modern, unified supervisory regime fit for the complexities of the 21st-century financial environment.
How Complyport Can Help
As the FCA prepares to take on its new supervisory responsibilities, Complyport stands ready to support firms in navigating this transition with confidence. With over two decades of regulatory experience, Complyport provides tailored AML/CTF compliance solutions for professional services firms that will soon come under FCA supervision.
Our team can help your business:
- Assess and update AML frameworks to meet the FCA’s expectations and align with risk-based supervision principles;
- Prepare for FCA engagement, including readiness reviews, policy gap analyses and mock supervisory assessments;
- Deliver targeted training for compliance teams and senior managers to ensure a clear understanding of new obligations;
- Streamline governance and reporting, helping firms to integrate AML oversight with broader compliance and risk management processes; and
- Provide ongoing advisory support, ensuring your firm remains compliant as regulatory expectations evolve.
For tailored guidance on how these reforms affect your firm, or to discuss a transition plan, contact Complyport’s AML specialists at www.complyport.co.uk.
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