The FCA has published its Finalised Guidance for firms on how to apply a proportionate and risk-based approach to UK politically exposed persons (PEPs), and their relatives and close associates (RCAs), for anti-money laundering purposes. A PEP is someone holding a prominent public position who is entrusted with prominent public functions either in the UK or elsewhere in the world. The Guidance follows the FCA’s report, published in July 2024, of its multi-firm review about the treatment of PEPs.
The FCA is updating its guidance to reflect changes to the legislative framework in the UK since 2017. In the updated guidance, the FCA:
- clarifies that firms should not treat non-executive Board members of civil service departments in the UK as PEPs;
- reflects changes to The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (Money Laundering Regulations 2017); and
- updates sign off for PEP business relationships.
The document contains (at Chapter 2) a Feedback Statement following the Consultation in relation to the Guidance, which ran from 18th July 2024 to 18th October 2024. The FCA received twenty-six written responses. The Guidance itself is set out at Annex 1.