The FCA has published Consultation Paper 17/13: Fourth Money Laundering Directive and Fund Transfer Regulation implementation (DEPP and EG) (CP17/13).
On 15 September 2016, HM Treasury published its consultation paper on the transposition of the Fourth Money Laundering Directive (4MLD) and the Fund Transfer Regulation (FTR). On 15 March 2017, HM Treasury published a further consultation together with the draft implementing regulations, the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR2017). The MLR2017 is stated to come into force on 26 June 2017 and will replace the Money Laundering Regulations 2007 (MLR2007) and the Transfer of Funds (Information on the Payer) Regulations 2007. The overall objective of the new regulations is to ensure that the UK’s anti-money laundering and counter terrorist financing regime is up-to-date, effective and proportionate.
In CP17/13 the FCA sets out proposed amendments to the Enforcement Guide (EG) and the Decision, Procedure and Penalties Manual (DEPP) in light of the proposed MLR2017.
In particular, the FCA will have new powers under the MLR2017 to address failures to meet relevant standards and to manage the risk of money laundering and terrorist financing effectively. These supplement powers carried over from the MLR2007. The FCA proposes that the FCA follows its current decision making process when exercising its powers under the MLR2017, with decision makers in each case as follows:
- the decision to give a notice proposing or deciding to give a direction under regulation 25 will be taken by the Regulatory Decisions Committee (RDC);
- the decision to give a notice proposing to refuse an application for registration under regulation 58 MLR2017 will be taken by FCA staff under executive procedures. If the applicant makes representations in response to such a proposal, the decision to give a notice refusing an application will be made by the RDC. In all other cases, the decision will be taken under executive procedures;
- the decision to give a notice proposing to cancel a person’s registration under regulation 59 will be taken by FCA staff under executive procedures. If the person makes representations in response to such a proposal, the decision to give a notice cancelling the registration will be taken by the RDC. In all other cases, the decision will be taken under executive procedures; and
- the decision to give a notice proposing to or deciding to impose a civil penalty on a person, i.e. a public censure or financial penalty under regulation 74 MLR2017, suspension, restriction or cancellation under regulation 75 MLR2017, or a prohibition under regulation 76 MLR2017, will be taken by the RDC.
The deadline for comments on CP17/13 is 7 July 2017. The FCA expects to publish final rules in July 2017.