FCA updates CBILS and BBLS statement with information on managing financial crime

Regulatory Updates | 11/11/20

The Financial Conduct Authority (FCA) has updated its online Statement on the UK Coronavirus Business Interruption Loan Scheme (CBILS) and the new Bounce Back Loan Scheme (BBLS) following the amendment to the BBLS on 10 November 2020. The update adds information on managing financial crime, and the FCA states that, for existing customers, where an authorised firm has carried out appropriate Customer Due Diligence (CDD) before it received an application under the Schemes, it does not need to make further checks. However, if an authorised firm has information – including any relevant flags or alerts – suggesting a customer poses a higher risk, for example, of fraud, money laundering, or terrorist financing, it should carry out additional checks.

As the financial crime risks may be significantly higher for new customers, authorised firms should carry out the normal CDD process in accordance with the Money Laundering Regulations 2017 (MLRs 2017). However, if the money laundering and terrorist financing risks associated with the new business relationship are low, an authorised firm may decide simplified due diligence is appropriate. Firms can also consider alternative verification methods as outlined in the FCA’s recent Dear CEO letter.