HM Treasury has published a draft statutory instrument setting out various proposed changes to the MLRs. The changes would take effect on various dates after the Regulations are made. Most changes would take effect within 21 days, but changes relating to crypto business would take effect later, in February and October 2027. The changes will make all the adjustments HM Treasury formerly confirmed it would address, and key changes:
- insert a new definition of “cryptoasset business”;
- generally substitute references to euros throughout the Regulations with references to sterling – invariably but not always substituting without currency conversion;
- introduce “selling an off-the-shelf” firm as a new activity covered by the MLRs when carried out by lawyers or TSCPs;
- make other clarificatory changes including to the provisions on complex or unusually large transactions;
- align transaction-based triggers across different types of regulated business;
- introduce a requirement to tell the FCA of any changes to information previously provided to it where it is required to information the FCA under Regulation 23;
- introduce new requirements for CDD in relation to pooled accounts;
- insert a new regulation on dealing with customers of insolvent banks;
- substitute “FATF call for action country” for references currently to “high-risk third country”;
- introduce EDD provisions relevant to crypto firms entering into correspondent relationships;
- amend various regulations to extend current obligations on credit and financial institutions also to include crypto asset businesses;
- clarifying the application of various provisions relating to trusts;
- including new provisions on change in control of crypto businesses; and
- making consequential amendments to other legislation.