MEMA has produced this financial crime series for firms, to understand the steps they can take to reduce their financial crime risk. It does not include all the financial crime risks a firm may face but provides an understanding of FCA expectations in this complex field.

Over the next few weeks, we are releasing sections to assist you in dealing with Financial Crime. The posts will cover key areas such as sanctions, money laundering, CDD and Governance. We will shortly be releasing our ebook which covers a lot of the topics.

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In our follow up series, to our Financial Conduct Authority handbook rules and guidance, we will cover an overview of the UK Financial Crime Legislation Framework.

Primary Legislation

The acts and regulations set out the lawful requirements, accepted standards and also the offences for non-compliance in the UK. It is important to note that whilst some of the legislation is transposed from EU directives, the majority of the legislation are purely acts made by the UK Government. An example of this is the Financial Services and Markets Act 2000 (“FSMA 2000”) which sets out how the UK financial services marketplace should function and lawfully appoints the Financial Conduct Authority and Prudential Regulation Authority as regulatory bodies. It also sets their ‘statutory objectives’.

The Proceeds of Crime Act and the Money Laundering, Terrorist Financing and Transfer of Funds Regulation 2017 are the principal laws used to prosecute money laundering.

• Bribery Act 2010
• Counter Terrorism Act 2008
• Immigration Act 2016
• Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017
• Financial Services and Markets Act 2000
• Fraud Act 2006
• Market Abuse Regulations 2015
• Proceeds of Crime Act 2002
• Terrorism Act 2000
• Theft Act 1968

Notable Regulatory Bodies

The regulatory bodies are those who are primarily interested in UK AFC matters. The FCA holds a statutory objective to maintain market integrity. The PRA are interested in financial crime matters which exposes the UK economy to a stability risk. HM Treasury is responsible for developing the UK’s financial and economic policies which include financial crime. The (“OFSI”) is responsible for overseeing compliance with UK sanctions compliance.

• Financial Conduct Authority (FCA)
• Prudential Regulation Authority (PRA)
• HM Treasury (HMT)
• National Crime Agency
• Office of Financial Sanctions Implementation (OFSI)

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Industry Accepted Standards

Industry-accepted best practices and standards are published by a number of notable bodies. In the UK, the key guidelines and standards are listed to the left but this is not an exhaustive list.

• Joint Money Laundering Steering Group Guidelines (JMLSG)
• Wolfsberg Group Questionnaire
• Financial Action Task Force Recommendations (FATF)
• Transparency International

Other Notable Legislators

Financial Ombudsman Service (FOS) are independent adjudicators in the UK who are tasked with settling disputes between customers and financial services institutions. HMRC are a government agency who are tasked primarily with the operation of the UK’s taxation system.

• Financial Ombudsman Service (FOS)
• HM Revenue and Customs (HMRC)