Annex 1 Firms’ Financial Crime Policies
Introduction
Last year all annex one firms received a dear CEO letter from the FCA expressing concerns over common failings they had identified in anti-money laundering frameworks.
Typical failings that the FCA identified include:
Business Model
Discrepancies between firms’ registered and actual activities, and lack of Financial Crime controls to keep pace with business growth.
Risk Assessment and Audits
Weaknesses in Business Wide Risk Assessments and Customer Risk Assessments.
Lack of Independent audits
Due Dilligence and Governanace
Ongoing Monitoring and Policies and Procedures – lack of detail in policies creating ambiguity around actions staff should take to comply with their obligations under the MLRs
Governance, Management Information and Training – lack of resources for Financial Crime, inadequate Financial Crime training and absence of a clear audit trail for Financial Crime related decision-making.
What can Annex 1 Firms expect from the FCA in 2025
Below is what to expect and what you need to do.
Will FCA contact Annex 1 Firms
The FCA have confirmed that they intend to increase their monitoring of Annex 1 firms, which means that from Early 2025 they will be steadily contacting all of them to ensure that they have acted on the dear CEO letter.
Gap Analysis
At the very least, the FCA expect firms to conduct a gap analysis of their own financial crime controls against the weaknesses identified above and to remediate any issues identified. They expect senior management to make this a top priority.
Time Frame
The FCA also expect this gap analysis to have taken place within 6 months of the letter being issued.
How Long has it been?
It has now been well over 6 months since that letter was issued, so any firms that have not conducted a gap analysis need to do one asap!
In summary, Annex 1 firms need to act now if they have not already completed their Independent Gap Analysis.
Here at AuthoriPay we have extensive knowledge of Annex 1 Firms and FCA regulations. For an honest take on getting your priorities in order, make that call today or drop us an email below and one of our expert consultants will give you all the help you need.
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AuthoriPay Ltd, Milton Hall, Ely Road, Cambridge, CB24 6WZ.