On 31 March 2021, the UK’s Financial Conduct Authority (FCA) published a Policy Statement which expands the scope of its annual financial crime data return (REP-CRIM) to almost three times as many firms from circa 2,500 to circa 7,000. New firms will be obliged to participate in REP-CRIM from 30 March 2022 onwards.

Firms now obliged to provide an annual REP-CRIM submission include banks, building societies and mortgage lenders (who were already included) and also now businesses undertaking certain MiFID-related activities as well as cryptoasset businesses (which came into scope of the UK Money Laundering Regulations in January 2020). Specifically, newly obliged firms are:

  • Those which hold client money or assets or carry on activity that poses higher money laundering risk;
  • Payment institutions;
  • Electronic money institutions;
  • Multilateral Trading Facilities (MTFs);
  • Organised Trading Facilities (OTFs); and
  • Crytpoasset exchange providers and custodian wallet providers.

The FCA cites that this large expansion is as a result of its assessment of money laundering risks and threats augmented with a consultation which took place during 2020. The larger data return will provide the FCA with greater insight into a range of indicators that reflect the potential money laundering risks. By capturing specific information about financial crime from a much-larger cross section of firms the FCA aims to be able to enhance national financial crime intelligence and drive their supervisory strategy.

This significant increase in scope of REP-CRIM highlights a need for newly obliged firms to consider their data availability and quality, as well as their ability to articulate their unique risk exposure and control environment in place to mitigate these risks.

For further information please get in touch with Lisa Lee Lewis, Clarinda Grundy or Weronika Sowa.