UK FCA restricts certain Annex 1 firms following concerns over anti-money laundering controls

The UK Financial Conduct Authority (FCA) has announced that restrictions have been placed on six unregulated lenders, known as Annex 1 firms, following concerns about their anti-money laundering policies, controls and procedures identified while assessing their applications. The restrictions limit the firms' ability to take on new customers or conduct new business with existing customers, including extending credit, and certain firms' restrictions require an independent review of their anti-money laundering framework.

The action forms part of the FCA's enhanced oversight of Annex 1 firms, which are required to register with the FCA for supervision under the Money Laundering Regulations (MLRs) but are not otherwise authorised or subject to wider FCA regulation. The FCA reminds firms that registration under the MLRs is not a substitute for regulated firms carrying out their own appropriate due diligence to understand the firm's business, in accordance with legislative requirements. This includes seeking direct confirmation from the firm of its registration status, conducting independent checks of the information it provides, and understanding and managing any risks.

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