By PAUL O’DONOGHUE, Senior Correspondent
THE Financial Conduct Authority (FCA) will begin taking over anti-money laundering (AML) supervision of UK professional services firms by the end of 2028.
The reform will replace the current system, which includes HMRC, the FCA, the Gambling Commission and 22 professional body supervisors.
Under the new plans, the FCA will become the main AML supervisor of the legal, accounting and corporate services sectors.
Labour peer Lord Pitt-Watson outlined the timeline during a recent House of Lords debate.
“The current expectation is that the first businesses will begin to be supervised by the FCA before the end of 2028,” he said.
“Further onboarding will take place in phases, with the broad aim that all firms within scope will be supervised by the FCA by mid-2030.”
He added that implementation should proceed “only when the necessary preparations are complete”.
This includes:
- Ensuring that appropriate systems and effective information-sharing arrangements are in place
- That supervisory staff are adequately trained
- That sufficient clarity is provided to firms about the future regime
Existing supervisors will continue to oversee firms and take enforcement action until the FCA assumes its new responsibilities.
Engagement as FCA takes on new AML role
The FCA is “already engaging with professional body supervisors and HMRC on information-sharing and data-sharing arrangements”, Pitt-Watson said.
Pitt-Watson stressed that the new regime would take account of differences between sectors.
“The Government fully recognise that effective supervision depends on supervisors understanding the sectors they regulate,” he said.
“Legal services providers, accountancy firms and trust and company service providers have different business models, risks and regulatory arrangements.”
The government will also consult on a future fee model before the FCA assumes responsibility.
“The Government expect fees to be proportionate and consistent with the FCA’s wider fee framework, where smaller firms generally face lower costs than larger firms,” Pitt-Watson said.
The UK government announced plans for the FCA to become the country’s primary AML watchdog last year.
The UK government described the move as a ‘simplifying reform’.
“The government believes that a [single] public organization overseeing professional services firms is the most effective approach,” the UK Treasury said.
In March, the FCA said that UK professional body supervisors “lack the teeth” to deter firms from breaching AML rules.
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