HM Treasury published a draft statutory instrument and policy note for technical consultation proposing targeted amendments to the UK’s Money Laundering Regulations, with a focus on practical operability, clarity and effectiveness across customer due diligence, pooled client accounts, cryptoasset business requirements and trust registration. Key proposals include aligning transaction-based customer due diligence triggers for letting agents and art market participants with those for high value dealers, and introducing a limited ability for credit institutions to complete identity verification after account opening for customers displaced by a bank or building society insolvency, subject to safeguards including notification to the Financial Conduct Authority and restrictions where enhanced due diligence is required. Enhanced due diligence would be refocused on Financial Action Task Force call for action countries and clarified to apply to transactions that are unusually complex or unusually large relative to what is typical for the sector. For pooled client accounts, the draft would remove their link to simplified due diligence and require financial and credit institutions to understand purpose and use, gather information about the customer’s business, assess and mitigate risk, and be able to request underlying client identity information. Other changes convert monetary thresholds from euros to sterling (with some adjustments, including EUR 15,000 to GBP 12,000 and EUR 1,000 to GBP 800), bring trust and company service providers selling off-the-shelf companies into scope, expand and refine Trust Registration Service registration and access requirements while removing Stamp Duty Reserve Tax as a standalone trigger, and strengthen coordination and information sharing by adding Companies House and the Financial Regulators Complaints Commissioner to relevant cooperation and disclosure provisions. Cryptoasset measures would align registration, fit and proper and change-in-control tests with the forthcoming Financial Services and Markets Act cryptoasset perimeter, add enhanced due diligence requirements for cryptoasset correspondent relationships and prohibit correspondent relationships with shell banks, and remove dual registration for firms authorised under FSMA. The consultation closes on 30 September 2025. Subject to feedback and parliamentary scheduling, the final instrument is expected to be laid in early 2026 and to come into force 21 days after being made, with cryptoasset provisions aligned to the commencement of the FSMA cryptoasset authorisation regime.

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