The UK Financial Conduct Authority has increased its scrutiny of Annex 1 firms after identifying risks that unregulated lenders, safe custody providers, money brokers and financial leasing companies could facilitate financial crime. Applicants for anti-money laundering registration must clearly demonstrate compliance with money laundering regulations and should expect the registration process to take longer. Each firm must maintain controls tailored to its own financial crime risks, governance and operations rather than relying excessively on a parent company’s framework or off-the-shelf procedures. The FCA is also concerned about unregulated lending through complex structures, including special purpose vehicles, and has reminded regulated firms to conduct due diligence on Annex 1 counterparties and directly confirm their registration status. The FCA has requested information from about 900 Annex 1 firms on their activities, business models and risks. Combined with work involving 300 firms in late 2025, this means the regulator will have contacted all registered Annex 1 firms and will use the resulting intelligence to identify and disrupt financial crime risks.
Financial Conduct Authority2026-08-07
UK Financial Conduct Authority increases scrutiny of Annex 1 firms and requests information from about 900 businesses
The UK Financial Conduct Authority is intensifying scrutiny of Annex 1 firms over financial crime risks and has requested information from about 900 businesses. Firms must demonstrate effective, tailored anti-money laundering controls, while regulated counterparties should verify their registration status and conduct appropriate due diligence. Registration applications are expected to take longer.