UK Financial Conduct Authority Policy Statement on Changes to Financial Crime Guide

The U.K. Financial Conduct Authority has published a policy statement on changes to its financial crime guide, following its consultation in April. The changes cover the following areas: (i) sanctions—to reflect information learnt from assessments of firms' sanctions' systems and controls following Russia's invasion of Ukraine in 2022; (ii) proliferation financing—to ensure that proliferation financing is explicitly referenced throughout the guide, where appropriate. This includes highlighting a 2022 change to the MLRs, which requires firms to conduct proliferation financing risk assessments; (iii) transaction monitoring—to provide further guidance on how firms can implement and monitor transaction monitoring systems. This includes supporting responsible innovation and new technological approaches; (iv) cryptoasset businesses—to make clear that cryptoasset businesses registered under the MLRs should refer to the guide; (v) Consumer Duty—to clarify that firms should consider whether their systems and controls are consistent with their obligations under the Duty; and (vi) consequential changes—includes replacing expired links, updating outdated references to EU rules and refreshing case studies based on more recent FCA enforcement notices.

The FCA sets out where additional clarity has been added in response to feedback to the April consultation. The FCA states that firms need to consider the adjustments that may be needed to their financial crime systems and controls. The FCA notes that it is also considering further revisions to other chapters in due course. The changes to the FCA Handbook to update the financial crime guide, as well as consequential changes, are set out in the policy statement and in the Financial Crime Guide (Amendment) Instrument 2024 (FCA 2024/46), which came into force on November 29, 2024.

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