PIMFA
FINANCIAL CRIME
Financial Crime is broadly any criminal conduct relating to money or financial services, including, for example, fraud, money laundering, the misuse of information (such as insider trading), bribery and corruption, handling the proceeds of crime, financing terrorism, or cybercrime. According to the Office of National Statistics, fraud was the most common crime type between April 2022-March 2023, with an estimated 3.5 million incidents of fraud in the UK experienced by adults aged 16 and over.
The PIMFA Financial Crime Committee facilitates discussion across all significant matters of financial crime, ensuring that member firms are kept fully informed and compliant with legislative and regulatory developments and are provided with the latest intelligence, approaches and tools to combat financial crime effectively.
latest news
FCA – Financial Crime Controls: Survey Findings
The FCA has published the findings of its financial crime controls in corporate finance firms survey, stating that two-thirds of corporate finance firms not required to submit financial crime returns may be falling short of money laundering rules.
The FCA highlights other findings and areas for improvement:
- 11% of firms reported having no documented business-wide risk assessment, which is a requirement under the Money Laundering Regulations.
- 10% of firms stated they did not retain documented evidence of customer due diligence.
- 29% of principal firms said they did not conduct financial crime risk assessments for their appointed representatives.
- 6% of principal firms reported not monitoring their appointed representatives’ compliance with financial crime regulations or conducting on-site visits or audits.
The FCA publication also sets out examples of good practice such as:
- Regularly updating their business-wide assessments to reflect emerging risks.
- Using detailed management information to strengthen financial crime controls.
- Regularly reporting financial crime concerns to senior management.
Read the press release here.
Access the survey findings here
FCA – Multi firm review findings: Combating romance fraud
The FCA has published findings from its multi firm review on combating romance fraud (prevention, detection and supporting victims).
The findings highlight the treatment of customers in vulnerable circumstances as an area of good practice, for example:
- Proactive steps to understand the personal circumstances contributing to customer vulnerability, such as emotional distress, social isolation or lack of support and thereby tailor support.
- Vulnerability markers added to victim accounts, enabling more tailored monitoring and engagement to help staff identify customers who may be at heightened risk of fraud.
- Specialist teams to ensure that support is aligned with the customer’s specific needs and circumstances.
The FCA state firms are not expected to identify every customer with characteristics of vulnerability (particularly in cases with limited customer engagement), however, firms are expected to support staff to identify signs of vulnerability, through training and resources.
The findings set out areas for improvement, for example:
- Many firms were unaware of key customer vulnerabilities, and this limited their ability to apply protective measures earlier.
- Some firms did not take appropriate safeguarding steps even after fraud was confirmed, despite clear signs of vulnerability and reasonable grounds for concern.
Noting obligations under Consumer Duty (PRIN 2A.2.1R and PRIN 2A.2.5R), the FCA states that, where such risks are identified, firms should ensure their systems, processes, and staff are equipped to respond appropriately, including considering whether it is necessary to inform relevant authorities.
The regulator expects all firms to consider these findings and assess whether their own systems, controls and customer engagement practices are sufficient to prevent and respond to romance fraud.
Read the findings here.
HMT – Reform of the Anti-Money Laundering and Counter Terrorism Financing Supervision Regime
HMT has published a response to the 2023 consultation on (Anti-Money Laundering and Counter Terrorism Financing (AML and CTF) supervisory reform.
- The response sets out the decision to consolidate responsibility for AML/CTF supervision of legal, accountancy and trust and company service providers with the creation of a Single Professional Services Supervisor (SPSS).
- The FCA will assume responsibility, supervising legal, accountancy, and trust and company service providers for AML/CTF purposes.
- Professional Body Supervisors will no longer hold AML/CTF supervisory responsibilities but will continue to oversee the wider professional conduct of their members.
- HM Revenues and Customs (HMRC) will also lose its supervisory responsibilities in relation to accountants and trust and company service providers, though will retain responsibility for the other sectors that it currently supervises.
- The implementation timeline will depend on the passage of primary legislation, but planning is already underway between the government and the FCA.
- The publication also notes the aim of publishing a separate consultation on the powers that the supervisor should have in early November.
Read more details here
FCA Consumer Duty update
The Financial Conduct Authority (FCA) has published further plans on work to streamline the rules following the introduction of the Consumer Duty.
The FCA’s action plan for 2025/26 includes:
- A summary of the work completed since March 2025.
- The work in progress.
- New work that has been announced as a result of the Leeds Reforms.
- The new work that the FCA are committing to as part of the Consumer Duty streamlining exercise and review.
Read the announcement in full here.
The FCA have also published an updated plan of Consumer Duty focus areas setting out priorities for the remainder of the year. For consumer investments, the FCA outline the following areas of interest:
- Tackling poor identification of clients with characteristics of vulnerability by wealth managers.
- Expectations for wealth and advice firms when assessing fair value.
- Risks to providing unsuitable advice.
- Complex exchange traded products.
- Loan-based crowdfunders (peer-to-peer).
- Model portfolio services.
Set out their plans to address concerns about Consumer Duty’s impact on wholesale firms – read the FCA letter to the Chancellor.
