FCA launches PEP review

FCA has published a paper setting out the issues it will consider as part of its review on the treatment of PEPs under s78 FSMA 2023. FCA notes that it does not have the power to change the law relating to the PEPs regime, but says it will look at how firms are:

  • applying the definition of PEPs to individuals – and whether they are applying it properly only to those who hold prominent positions and not junior staff;
  • carrying out proportionate risk assessments of UK PEPs and their family members and known close associates;
  • applying EDD and ongoing monitoring following a proportionate risk-based approach;
  • deciding to reject or close accounts for PEPs, family and associates;
  • communicating with their PEP customers, including asking for information to keep their EDD up to date and how they approach questions and complaints from PEP customers; and
  • keeping their PEP controls under review.

FCA will use information received from PEPs and their families and associates, information from firms and from FOS and supervisory reviews.

The Review will report back by June 2024.

Emma Radmore