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UK watchdog gives firms six months to get anti-moneylaundering 'basics' right

Published 05/03/2024, 10:15
Updated 05/03/2024, 10:45
© Reuters. Signage is seen for the FCA (Financial Conduct Authority), the UK's financial regulatory body, at their head offices in London, Britain March 10, 2022. REUTERS/Toby Melville/File Photo

LONDON (Reuters) -Britain's financial watchdog said on Tuesday that lenders, money brokers and leasing companies were "not getting the basics right" in their safeguards against moneylaundering.

The Financial Conduct Authority (FCA) said in a letter to heads of firms that they have six months to check their controls against financial crime.

"Where firms do not take suitable steps in response to our letter, they could face regulatory action, including possible enforcement action," the FCA said.

Actions could include requiring firms to appoint an external reviewer of controls, and enforcement action that can include fines and rescinding authorisations.

The watchdog said it was targeting 1,000 companies such as certain lenders, safe custody providers, money brokers and financial leasing companies, some of whose activities are supervised for anti-moneylaundering compliance.

A data-led review and onsite inspections of a sample of companies found financial crime controls had not kept pace with business growth, failures to assess risks from customers properly, and inadequate resourcing of oversight, the FCA said.

© Reuters. Signage is seen for the FCA (Financial Conduct Authority), the UK's financial regulatory body, at their head offices in London, Britain March 10, 2022. REUTERS/Toby Melville/File Photo

"We expect you to complete a gap analysis against each of the common weaknesses we have outlined within six months of receipt of this letter," the FCA told firms.

"In future engagements with your firm we are likely to ask you to provide us with the findings from the gap analysis, evidence of the actions you have taken to address the gaps identified, and the progress of any remedial work," the FCA said.

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