FCA AML Regulations: What UK Firms Should Understand
In brief: FCA AML regulation focuses on risk-based financial crime systems, controls, customer due diligence, monitoring, and evidence that senior management can defend.
Key points
- FCA-regulated firms need proportionate AML and financial crime controls.
- PEP treatment should be risk-based and proportionate, especially for UK PEPs.
- Evidence matters: policies, decisions, approvals, monitoring, and review records should connect.
What are FCA AML regulations?
FCA AML regulation refers to the rules, guidance, and supervisory expectations that apply to firms regulated by the Financial Conduct Authority for anti-money laundering and financial crime controls. The detail depends on the firm's permissions, business model, customers, products, and risk profile.
For many Certivus users, the FCA also matters as context: clients may be FCA-regulated, directors may hold controlled roles, or AML teams may need to understand FCA language around financial crime systems and controls.
What the FCA expects in practice
FCA AML expectations usually come down to whether the firm can show:
- A risk-based approach.
- Customer due diligence and enhanced due diligence.
- PEP, sanctions, and adverse media controls.
- Ongoing monitoring.
- Internal reporting and escalation.
- Senior management oversight.
- Training, testing, and remediation.
- Clear records.
PEP treatment
The FCA's FG25/3 PEP guidance emphasises proportionate, risk-based treatment of PEPs, their relatives, and close associates. That means firms should understand the specific exposure rather than applying a blanket rule.
Evidence checklist
| Control | Evidence |
|---|---|
| Risk assessment | Firm, client, product, geography, delivery channel, and transaction risk. |
| CDD | Identity, ownership, purpose, expected activity, and source evidence. |
| Screening | Results, possible-match review, and escalation notes. |
| Monitoring | Review triggers, changed circumstances, and periodic review. |
| Governance | Senior approval, policy review, training, and issue remediation. |
Common mistake
The common mistake is having policies that do not connect to actual client files. A strong file shows how the policy was applied to the specific customer or matter.
This guide is general information and is not legal advice.