The Financial Conduct Authority (FCA) will begin supervising businesses for anti-money laundering compliance before the end of 2028, with a “broad aim” for all firms within scope to be included by mid-2030.
The plans were revealed by the Labour peer Lord Pitt-Watson during a House of Lords debate on the Financial Services and Markets Bill on Monday (7th September). The government recognises the concern that professional services firms should continue to receive clear guidance, appropriate support and access to sector-specific guidance following the transition, Lord Pitt-Watson said.
The FCA has provided “additional clarity”, he explained, with onboarding to take place in phases beginning in by the end of 2028 and complete by mid-2030.
Implementation will only proceed only when the necessary preparations are complete, which includes ensuring that appropriate systems and effective information-sharing arrangements are in place, supervisory staff are adequately trained, and sufficient clarity is provided to firms about the future regime.
Existing supervisors will continue to supervise firms and take enforcement action until the FCA assumes its new responsibility. The FCA is already engaging with professional body supervisors and HMRC on information-sharing and data-sharing arrangements, Lord Pitt-Wilson said.
He added: “The Government fully recognise that effective supervision depends on supervisors understanding the sectors they regulate.
“Legal services providers, accountancy firms and trust and company service providers have different business models, risks and regulatory arrangements.
“Of course, the FCA already supervises a large and diverse population, including many smaller firms, and has extensive experience applying a proportionate, risk-based approach across different business models and firm sizes.”
The reform is not seeking a banking-style or one-size-fits-all supervisory model for professional services firms, the lord explained, but will be “proportionate and risk-based and establish a more consistent and effective framework, while recognising the different characteristics and risks of those sectors”.
A consultation will be launched on the design of a future fee model before the FCA assumes responsibility for professional services firms.
Fees are expected to be proportionate and consistent with the FCA’s wider fee framework, with smaller firms facing lower costs than larger firms.
“The detailed fee structure will depend on the final supervisory model and is therefore better developed through consultation”, Lord Pitt-Wilson said.
