HMT consultation response on reform of UK's AML/CTF supervisory regime for professional services firms

HM Treasury (HMT) has published its consultation response on the reform of the UK's anti-money laundering and counter-terrorist financing (AML/CTF) supervisory regime for professional services firms. This follows the decision announced last October that the UK Financial Conduct Authority (FCA) will be the sole AML supervisor for legal service providers, accountancy service providers and trust and company service providers under the Money Laundering Regulations 2017 (MLRs). A consultation, published in November 2025, set out the proposed key responsibilities and duties for the FCA's expanded role, along with the legislative changes needed to implement these reforms.

The consultation response includes the policy decisions on these proposals, including:

• Registration and gatekeeping. Making the FCA responsible for registering professional services firms carrying out AML/CTF regulated activity and for maintaining a public register of those firms. The FCA will also be given an explicit power to cancel a firm's registration where it is no longer carrying out regulated activity. In addition, the application of regulation 58 "fit and proper" requirements, enabling supervisors to assess the integrity, competence and compliance history of firms and their beneficial owners, officers and managers, will be extended across legal and accountancy service providers, aligning these sectors with trust and company service providers, which are already within scope.
• Risk-based supervision and supervisory tools. Existing duties relating to risk-based supervision will apply to the FCA's expanded remit, including the extension of regulations 17 and 46, which requires supervisors to identify and assess money laundering and terrorist financing risks, develop and maintain risk profiles, and apply a risk based approach to monitoring firms' compliance with the MLRs. In addition, the FCA will be equipped with additional supervisory tools, including the power to appoint a skilled person and the power to issue directions to firms.
• Guidance. Transferring responsibility for issuing and approving AML/CTF guidance to the FCA, with HMT retaining limited oversight, including the ability to intervene where necessary, to ensure alignment with MLR policy intent.
• Information and intelligence. Extending existing information-gathering, inspection and information-sharing powers to the FCA's supervision of professional services firms. HMT confirms that it is seeking to improve the effectiveness of existing information-sharing mechanisms within the current framework for Suspicious Activity Reports (SARs), without introducing new legislative requirements to mandate the sharing of SARs directly with supervisors.
• Enforcement and appeals. Post-transition, the FCA will be able to exercise the existing range of enforcement powers available under the MLRs in relation to professional services firms, including civil sanctions and, where appropriate, criminal proceedings.

The FCA will remain operationally independent while accountable to HMT and Parliament, with the Office for Professional Body Anti-Money Laundering Supervision continuing oversight during the transition period before its functions are expected to cease once the FCA fully assumes AML/CTF supervisory responsibilities.

The implementation plan will be developed in more detail, with arrangements to be progressed through the Financial Services Bill and implemented via secondary legislation, amending the MLRs during the FCA's implementation period.

Return to main website.