FCA consultation on extension of annual financial crime reporting obligation

Regulatory Updates | 24/08/20

The Financial Conduct Authority (FCA) has published consultation paper CP20/17, Extension of Annual Financial Crime Reporting Obligation. The FCA’s annual financial crime reporting (REP-CRIM) obligation indicates to it the potential money laundering risk faced by a firm based on its regulated activities and the nature of its customers. Currently, firms are obliged to provide the FCA with REP-CRIM information if they are of a certain type (including banks, building societies, and mortgage lenders) or carry out certain types of activity and have a total revenue of over £5m per year, for example intermediaries, e-money institutions, and consumer credit firms.

The FCA proposes to extend the scope of firms required to provide REP-CRIM information to include firms that carry on regulated activities that the FCA considers to pose a higher potential risk of money laundering, irrespective of their revenue. The list of activities is included in Annex 4 of the consultation, and includes the management of UCITS and AIFs; cryptoasset exchange provision; Custodian Wallet provision; investment management; and the establishing, operating, or winding up of collective investment, personal pension, and stakeholder pension schemes. The consultation closes on 23 November 2020, after which the FCA will consider the feedback received and plans to publish a Policy Statement containing any final rules by Q1 2021.