Annex 1 firms: AML gaps
Published on: 24/10/2024 00:00
Introduction
The six month deadline to complete a gap analysis has now passed for Annex 1 firms, following the FCA’s publication of the ‘Dear CEO letter’ on anti-money laundering (AML) failings in March. By now, the regulator expects firms to have completed a gap analysis against the common weaknesses identified in the letter and to have started to remediate any gaps.
While not otherwise regulated by the FCA, Annex 1 firms must register for compliance with the Money Laundering Regulations (MLRs), meaning that the practice points raised by the letter are worth consideration by any other firm that must comply with the MLRs.
Pathlight Associates regularly sees firms fail to action responses to weaknesses, or fail to internally evidence those responses to an appropriate standard. There can be serious consequences for these failings, which often lead to s165 requests for more information, restrictions on business activity, or being placed into a s166 (Skilled Person Review) process.
