FCA annual financial crime reporting obligation extended to a wider range of firms,
On 31 March 2021, the Financial Conduct Authority (FCA) published policy statement PS21/4
PS21/4 extends the annual financial crime reporting obligation to a wider range of firms, including cryptoasset businesses.
Starting from 30 March 2022, more firms will need to submit the annual ‘REP-CRIM’ financial crime report.
It is expected that the number of relevant entities with reporting obligations will increase approximately from 2,500 to 7,000 (of the approximately 22,000 businesses the FCA oversees).
REP-CRIM is designed to
- Provide the FCA with information on a range of indicators that reflect the potential money laundering risks that a firm may be exposed to and based on the regulated activity it undertakes.
The Policy Statement brings into scope of the relevant reporting obligations cryptoasset businesses which are regulated under the Money Laundering Regulations 2017 (MLRs), namely
- Cryptoasset exchange providers and custodian wallet providers.
These businesses also need to register with the FCA to undertake cryptoasset activity in the UK from 10 January 2021.
The FCA clarified that cryptoasset businesses are not required to submit the sanctions-specific information set out in section 4 of REP-CRIM, but they may choose to do so voluntarily.
Also the fraud-related questions under section 5 also remain voluntary - as it does for all firms submitting REP-CRIM.
Cryptoasset firms that will be brought into the scope of REP-CRIM for the first time will need to start preparations to submit the return when it is due.