HM Treasury has now published its response to the consultation on transferring anti-money laundering (AML) supervision from the current professional body supervisors, including the SRA, to the Financial Conduct Authority (FCA). While legislation and implementation are still to follow, the direction of travel is now much clearer.
The proposals envisage the FCA becoming the single AML supervisor for legal and accountancy firms undertaking regulated work. The FCA would maintain a public register of supervised firms, introduce strengthened registration and “fit and proper” requirements, and have enhanced supervisory powers, including the ability to direct firms and appoint skilled persons where appropriate. Guidance for the legal sector would continue to be drafted by the profession but would require FCA approval, with HM Treasury retaining an oversight role.
Importantly, nothing changes for firms at present. Solicitors and law firms must continue to comply with the Money Laundering Regulations and remain subject to SRA supervision until the new regime is formally introduced. The Government has also acknowledged the importance of a carefully managed transition, with an emphasis on minimising disruption and making use of existing regulatory information wherever possible.
Although the transfer is unlikely to happen overnight, firms should expect increasing regulatory scrutiny and should ensure that their AML framework, firm-wide risk assessment, policies, procedures, controls and training remain robust and up to date. A strong compliance framework will make any future transition significantly easier.
If you would like an independent review of your firm’s AML arrangements, or support updating your policies and procedures in readiness for future regulatory changes, Legal Compliance Services would be pleased to help.
