The UK Government has launched a fresh consultation, titled “Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs) Supervisory Reform: Duties, Powers and Accountability” which sets out proposals to overhaul how professional services firms (legal, accountancy, trust and company service providers) are supervised for Anti-Money Laundering and Counter-Terrorist Financing (“AML/CTF”) compliance. This marks a significant step towards implementing the Government’s decision to transfer AML/CTF supervision of these sectors to the Financial Conduct Authority (“FCA”) as a single public-sector regulator.
Reasons for Reform
The current supervisory regime involves 22 private-sector Professional Body Supervisors (“PBSs”) alongside HM Revenue & Customs (“HMRC”), overseeing various parts of the legal, accountancy and trust and company service provider sectors. The Government argues that this fragmented model creates inconsistency, supervisory gaps and vulnerabilities to exploitation by bad actors.
In light of increasing concerns over economic crime, the proposed reform seeks to establish a clearer, stronger and more coordinated supervisory framework.
Key Proposals in the Consultation
The consultation sets out a package of reforms centred on strengthening and unifying AML/CTF oversight:
- Registration
The FCA would register all in-scope professional services firms, apply fit-and-proper checks and maintain a public register. This aims to close gaps in supervision, prevent weak entrants and improve transparency.
- Risk-BasedSupervision
A unified FCA supervisory model would replace the varied approaches of existing PBSs. The FCA would regularly update firm risk profiles, target higher-risk entities, conduct thematic reviews and deploy supervisory tools such as skilled person reports (“s166”) and formal directions under Regulation 49 of the MLRs.
- Guidance andIntelligence Sharing
The FCA would assume responsibility for issuing sector-specific guidance and benefit from enhanced intelligence-sharing capabilities, including access to Suspicious Activity Reports (“SARs”) and greater coordination with law enforcement.
- Enforcement andAppeals
The FCA would have full enforcement powers under the MLRs, including the ability to impose civil penalties, issue censures and apply prohibitions. Firms would retain the right to challenge decisions via the Upper Tribunal and the courts.
- Fees,Funding and Transition
Supervision would be funded through FCA fees, with potential recovery of enforcement costs. The transition is expected to span multiple years, involving collaboration between the FCA, HMRC, PBSs and the Office for Professional Body Anti-Money Laundering Supervision (“OPBAS”).
- Accountability andIndependence
The FCA would remain operationally independent, but accountable to HM Treasury, Parliament and the public through established reporting channels. The new model is designed to improve transparency and trust across the supervisory landscape.
Implications and Challenges
A single public-sector supervisor promises more consistent oversight, better information-sharing and stronger deterrence against non-compliance. It should also reduce regulatory arbitrage and help close the unregulated perimeter, enhancing the UK’s resilience to illicit finance.
However, the transition will not be without challenges. Firms currently supervised by PBSs will need to adapt to FCA processes, expectations and potentially higher fees. Questions also remain about preserving sector-specific knowledge and avoiding duplication where firms are subject to parallel professional-body oversight.
For professional services firms, the proposed changes mean:
- Stricter gatekeeping and fit-and-proper standards;
- Greater scrutiny of registration and ongoing compliance;
- Increased use of supervisory tools and interventions.
From the Government’s standpoint, the move aligns the UK with international expectations, including the Financial Action Task Force (“FATF”) standards, which call for strong, risk-based systems to combat money laundering and terrorist financing.
Next steps
The consultation runs from 6 November 2025 until 24 December 2025. Stakeholders (including firms, professional bodies, supervisory authorities, law-enforcement and other interested parties) are invited to respond to the questions posed throughout the document. Following the consultation period, the Government intends to legislate to amend the MLRs and other relevant legislation to give effect to the new supervisory model.
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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