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.
18th July 2024
Financial Conduct Authority review findings: The treatment of politically exposed persons | GC 24-4 consultation on proposed changes to guidance
The Financial Conduct Authority (FCA) have published their multi firm review on the treatment of politically exposed persons.
The publication sets out findings on how effectively firms are following the current guidance on the treatment of politically exposed persons (PEPs) for anti money-laundering purposes.
The review found most firms had systems and controls designed to implement the regulator’s guidance.
It also found all firms need to make improvements, for example:
- use of definitions for PEPs and RCAs that are wider than those in the regulations and FCA Guidance
- lack of effective arrangements to assess if the PEP classification was still appropriate after the PEP had left public office
- failure to consider the customer’s actual risk in their assessment and rating, and did not give a clear rationale for their risk rating
- improvements needed in the clarity and detail of their communications with PEP and RCA customers
- improvements to their staff training
- a need to update their policies to reflect recent legislative amendments to treat UK PEPs and RCAs as having a lower level of risk than a foreign PEP, unless they have other risk factors
Based on these findings, the FCA expect all firms to check that their policies, procedures and controls are in line with the guidance and to refer to the review’s findings, including the good practices noted.
The review can be accessed here.
The FCA have also issue a consultation on proposed targeted clarifications to the guidance which closes on 18 October 2024.
Following an assessment of responses, the FCA will publish a new version of the guidance.
GC24- 4 sets out the FCA’s proposed amendments.
