FCA is consulting on the possible extension of its annual financial crime reporting obligation. It wants to include firms that carry on activities that potentially pose a higher money laundering risk.
FCA currently assesses whether the reporting requirement applies by looking at firm type and, for some types of firm, revenue thresholds, and as a result, applies it to around 2,500 of the 23,000 firms it supervises under the MLR. It now wants to extend it to other high risk firms, irrespective of their revenue.
The requirements will apply unchanged to
- all UK, EEA and non-EEA banks, building societies, mortgage lenders and administrators and firms offering life and annuity insurance products; and
- all firms with total annual revenue of £5m or more who advise on investments or arrange deals in investments, in each case without holding client money or assets, advise on pension transfers and opt-outs or carry on credit-related regulated activity
Under the proposals, REP-CRIM information would be required from:
- all authorised firms that hold client money or assets
- all authorised firms that carry on specified activities – dealing in investments as principal or agent, managing investments, assisting in the administration and performance of a contract of non-investment insurance, establishing, operating or winding up a CIS or personal or stakeholder pension scheme, managing a UCITS or AIF, safeguarding and administering investments, and acting as a trustee or depositary of a UCITS or an AIF
- all payment institutions except those that only carry out money remittance (under HMRC supervision), AIS or PIS or EEA institutions operating under a services passport
- all EMIs
- all MTFs or OTFs and
- all cryptoasset exchange providers and custodian wallet providers.
The requirement will not apply to home finance mediation activities, or to making arrangements with a view to transactions in investments, as these fall outside the MLR.
Consultation closes on 23 November.