FCA brings more firms within scope of financial crime reporting obligations

Following a consultation in August last year the FCA has announced it will be extending the number of firms required to submit an annual financial crime reporting (REP-CRIM) form, from 2,500 to around 7,000. 

Completed and returned REP-CRIM forms provide the FCA with information about firms’ potential money laundering risks based on the regulated activities they carry out. 

The extension of reporting requirements affects firms supervised under the Money Laundering Regulations (MLRs). This primarily means banks, building societies and cryptoasset businesses.

However, the FCA has pointed out that general insurance brokers who lend money to fund premium finance could be affected and will be issuing a separate update on this issue very shortly.

The firms who will now have to submit REP-CRIM forms include:

  • FSMA authorised firms who fall within the scope of the MLRs who either hold client money or assets under FCA Handbook CASS 5,6 or 7 or who carry on activity considered to pose a higher money laundering risk e.g., dealing in investments as agent and managing investments
  • All payments institutions, other than those whose activities are limited to money remittance (supervised by HMRC for AML purposes)  and/or providing account information or payment initiation services
  • Account information services and/or payment initiation services providers, who do not receive or hold clients’ money or carry out payment
  • transactions, and hence pose a lower AML risk
  • Persons with temporary PI authorisation who, immediately before IP completion day, were providing payment services other than through a branch in the UK or a UK-based agent
  • All electronic money institutions
  • All Multilateral Trading Facilities
  • All Organised Trading Facilities 
  • All cryptoasset exchange providers and custodian wallet providers.

The REP-CRIM form asks for data about both external SARs filed with the NCA and internal reports made within the firm. REP017 returns are only completed by payment service providers and ask questions that are different to the (voluntary) fraud questions in REP-CRIM.

Firms being brought into scope are required to submit their first REP-CRIM within 60 business days of their first Accounting Reference Date after 30 March 2022.

For further details on this story, or any compliance-related topic, contact our expert team on 01925 767888, or email helpline@ukgigroup.com.

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