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Financial Crime

If you are a new firm to regulation and applying for FCA authorisation you must take note of the rules and guidance in the system and controls rulebook 6.3.

If the rules are applicable to your firm then you must ensure that you have policies and procedures established to include processes that:

Enable your firm to identify, assess, monitor and manage money laundering risk.
Are comprehensive and proportionate to the nature scale and complexity of your business.
All financial services firms are at risk of being used to launder the proceeds of crime and in doing so you may find you are in breach of your legal requirements. So that your business can understand its risks you must carry out a regular risk assessment, this helps you to:

Understand the risks to your business.
Monitor the adequacy of your internal controls framework.
When you carry out your risk assessment you should consider the following key points:

  •        Your customer profile
  •        Products and services
  •        Distribution channel
  •        Complexity and volume 
  •        Processes and systems

Remember you may also have additional requirements to meet the Terrorism Act 2000, Proceeds of Crime 2002 and the Money Laundering Regulations as well as the FCA systems and controls.

Before the FCA approve your application they want to know that you have adequate controls to:

  • Train all your staff
  • Management information for reporting to senior management
  • Risk management policies and procedures
  • Risk assessment
  • Know your customer
  • On going monitoring

Your business may need to allocate a Director or senior manager overall responsibility for establishing an effective anti money laundering framework. For further information the FCA provides guidance on the steps you can take to reduce the risk of financial crime, please see Financial Crime a guide for firms.