The Financial Conduct Authority (FCA) has reported restrictions on six Annex 1 lenders following concerns about their anti-money laundering policies, controls and procedures identified while assessing their applications. Imposed at each firm’s request, the restrictions limit their ability to accept new customers or conduct new business with existing customers, including extending credit. Annex 1 firms require registration for supervision under the Money Laundering Regulations but are not authorised or subject to wider FCA regulation. The restrictions vary by firm. Kingscrown Finance Ltd must wind down its existing loan book in an orderly manner and faces limits on receiving payments from existing customers. MOMSB Ltd, Momentus Capital Ltd, Grosvenor Funding Ltd and Grosvenor Funding (North West) Ltd face prohibitions on new customers and new lending arrangements, with limited exceptions for MOMSB and Momentus. Their restrictions also limit acceptance of payments from existing customers and require independent reviews of their anti-money laundering frameworks. Abbital Ltd’s restrictions specify when it may accept new customers, enter into new lending arrangements or receive payments from existing customers, and require an independent review of its anti-money laundering systems and controls. The action forms part of enhanced oversight of Annex 1 firms, which must demonstrate that they understand and can manage their financial crime risks. The FCA is assessing responses to an information request sent to around 900 registered Annex 1 firms to identify risks and determine where further action is needed. Regulated firms dealing with Annex 1 firms must conduct their own due diligence, including obtaining direct confirmation of registration status, independently checking information provided and managing identified risks. Registration alone is not a substitute for those checks.

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