Emma RadmoreFCA has written to CEOs of the 1,000 Annex I firms it supervises (firms which do not need FSMA authorisation but which carry on activities subject to the MLRs for which FCA is the appropriate supervisor). It has carried out a review of these firms’ financial crime prevention compliance, and has noted several basic issues:
- firms’ registered activities do not match what they actually do;
- financial crime controls which do not keep pace as the business grows and changes;
- poor risk assessment of both the firm’s own and its customers’ business;
- policies that were not up to date, lacked detail and did not evidence ongoing monitoring; and
- lack of adequate resourcing and oversight.
FCA asks all firms to assess their controls against the weaknesses set out in the letter in the next 6 months and take prompt action to resolve any problems they find. FCA says it is likely to ask firms to provide their gap analyses and evidence of what actions they have taken and are taking to address issues.