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FCA Dear CEO letter for Annex 1 firms AML control failings - 5 March 2024


5 March 2024 - the FCA has issued a new Dear CEO letter for AML control failings.

This one is specifically aimed at lenders, safe custody providers, money brokers and financial leasing companies classified as Annex 1 firms (about 1,000 firms).

The material weaknesses are not necessarily anything that differs from those seen in other sub-sectors the FCA supervises.

The 2024 letter calls out the critical areas of concern:

  • Business Model – discrepancies between firms registered and actual activities and lack of financial crime controls to keep pace with business growth. This follows a similar perspective from the multi-firm review on fast-growing firms.
  • Risk Assessment – weaknesses in Business Wide Risk Assessments and Customer Risk Assessments -
  • Due Diligence, 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

The FCA found common issues, including:

  • Discrepancies between firms registered and actual activities.
  • Financial crime controls, which had not kept pace with business growth.
  • A failure to properly assess their or their customers’ activities.
  • Inadequate resourcing and oversight of financial crime issues and requirements.

The FCA’s Dear CEO letter on anti-money laundering can be found here (pdf).


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