FCA Dear CEO letter for Annex 1 firms AML control failings - 5 March 2024
05/03/2024
5 March 2024 - the FCA has issued a new Dear CEO letter for AML control failings.
This one is specifically aimed at lenders, safe custody providers, money brokers and financial leasing companies classified as Annex 1 firms (about 1,000 firms).
The material weaknesses are not necessarily anything that differs from those seen in other sub-sectors the FCA supervises.
- 2021 = RETAIL BANKS = https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-common-control-failings-identified-in-anti-money-laundering-frameworks.pdf
- 2023 = FCA PRIORITIES FOR PAYMENTS FIRMS = https://www.fca.org.uk/publication/correspondence/priorities-payments-firms-portfolio-letter-2023.pdf
The 2024 letter calls out the critical areas of concern:
- Business Model – discrepancies between firms registered and actual activities and lack of financial crime controls to keep pace with business growth. This follows a similar perspective from the multi-firm review on fast-growing firms.
- Risk Assessment – weaknesses in Business Wide Risk Assessments and Customer Risk Assessments -
- Due Diligence, Ongoing Monitoring and Policies and Procedures – lack of detail in policies creating ambiguity around actions staff should take to comply with their obligations under the MLRs
- Governance, Management Information and Training – lack of resources for Financial Crime, inadequate Financial Crime training and absence of a clear audit trail for Financial Crime related decision-making
The FCA found common issues, including:
- Discrepancies between firms registered and actual activities.
- Financial crime controls, which had not kept pace with business growth.
- A failure to properly assess their or their customers’ activities.
- Inadequate resourcing and oversight of financial crime issues and requirements.
The FCA’s Dear CEO letter on anti-money laundering can be found here (pdf). https://www.fca.org.uk/publication/correspondence/dear-ceo-letter-action-response-common-control-failings-anti-money-laundering-frameworks.pdf
The Team
Meet the team of industry experts behind Comsure
Find out moreLatest News
Keep up to date with the very latest news from Comsure
Find out moreGallery
View our latest imagery from our news and work
Find out moreContact
Think we can help you and your business? Chat to us today
Get In TouchNews Disclaimer
As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.
As well as owning and publishing Comsure's copyrighted works, Comsure wishes to use the copyright-protected works of others. To do so, Comsure is applying for exemptions in the UK copyright law. There are certain very specific situations where Comsure is permitted to do so without seeking permission from the owner. These exemptions are in the copyright sections of the Copyright, Designs and Patents Act 1988 (as amended)[www.gov.UK/government/publications/copyright-acts-and-related-laws]. Many situations allow for Comsure to apply for exemptions. These include 1] Non-commercial research and private study, 2] Criticism, review and reporting of current events, 3] the copying of works in any medium as long as the use is to illustrate a point. 4] no posting is for commercial purposes [payment]. (for a full list of exemptions, please read here www.gov.uk/guidance/exceptions-to-copyright]. Concerning the exceptions, Comsure will acknowledge the work of the source author by providing a link to the source material. Comsure claims no ownership of non-Comsure content. The non-Comsure articles posted on the Comsure website are deemed important, relevant, and newsworthy to a Comsure audience (e.g. regulated financial services and professional firms [DNFSBs]). Comsure does not wish to take any credit for the publication, and the publication can be read in full in its original form if you click the articles link that always accompanies the news item. Also, Comsure does not seek any payment for highlighting these important articles. If you want any article removed, Comsure will automatically do so on a reasonable request if you email info@comsuregroup.com.