The 2026 AML Regulations will come into force in June/July 2026: What firms need to change now.

The UK Government laid the Money Laundering and Terrorist Financing (Amendment) Regulations 2026 before Parliament on 25 March 2026.

• These targeted amendments to the 2017 Money Laundering Regulations (MLRs) are expected to come into effect (most provisions 21 days after being made).
• The changes refine
• Customer due diligence (CDD),
• Enhanced due diligence (EDD),
• High-risk country rules,
• Pooled client accounts, and
• The Trust Registration Service (TRS).
• They promote
• A more risk-based, proportionate, and judgment-driven approach,
• Reducing automatic triggers
• While increasing the expectation that firms can evidence their decisions.
• This aligns with FATF standards, addresses overly cautious practices, and closes specific gaps (e.g., in trusts and crypto).
• Firms must
• Revisit policies,
• Update systems and monitoring thresholds,
• Strengthen documentation, and
• Retrain staff.
• Regulators (FCA, HMRC, etc.) will expect clear evidence of implementation rather than box-ticking.

What the new thresholds and EDD rules mean in practice

CDD monetary thresholds will switch from euros to sterling (using a one-to-one conversion, except where needed for FATF alignment). Key examples include:

• Occasional transactions: €1,000 → £800
• Certain high-value triggers: €15,000 → £12,000 (or £10,000 in some contexts)
• E-money and other limits restated in GBP

Practical impact:

• Update all CDD trigger engines, onboarding systems, transaction monitoring rules, and policies immediately.
• This is largely administrative but will capture slightly different transaction volumes and requires system recalibration.

EDD triggers are sharpened:

• Transactions now require EDD if “unusually complex or unusually large” (previously “complex” or “unusually large”).
• This narrows the trigger to reduce overly risk-averse behaviour.
• Firms must define “unusually complex” in their context and apply it consistently.
• High-risk third countries (HRTCs):
• Mandatory EDD (and enhanced ongoing monitoring) now applies only to FATF “Call for Action” countries (the blocklist).
• The “Increased Monitoring” (grey list) no longer automatically triggers EDD but remains a relevant factor in overall risk assessments.

In practice:

• Greater reliance on professional judgement.
• Firms must document why a transaction is (or is not) “unusual” and why a particular level of EDD was chosen.

Pooled client accounts: what banks and firms now need to do

• Pooled client accounts (PCAs) move to a clearer risk-based framework.
• Simplified due diligence (SDD) is retained, but with stricter conditions:
• The PCA holder must be MLR-regulated (or equivalent),
• The relationship must present low ML/TF risk, and
• Information on underlying clients must be available on request.

Banks/firms providing PCAs

• Must take reasonable measures to understand the account's purpose and how the customer proposes to use it, ensure consistency with the customer’s risk profile, and document the risk assessment.

PCA-holding firms (e.g., law firms)

• Must maintain accurate records of monies in the account and
• Provide information on underlying clients/UBOs on request (subject to legal privilege and confidentiality protections).

Practical impact:

• Applies only to new PCAs created after the rules come into force. Existing arrangements are grandfathered but should be reviewed.

Changes to high-risk country rules and TRS requirements

• As noted above, HRTC EDD is now limited to FATF Call for Action countries only.

Trust Registration Service (TRS) reforms include:

• Registration extended to certain non-UK express trusts that hold UK land.
• New de minimis exemption for low-value, low-risk trusts.
• Two-year exemption for trusts arising on death is widened.
• Scottish survivorship destination trusts are exempted.
• Stamp Duty Reserve Tax removed as a sole trigger for registration.

Practical impact:

• Firms involved in trust work should review portfolios for new registration obligations and potential deregistration.

What regulators are likely to expect from firms

• Regulators want
• Fewer automatic assumptions and
• More evidence-based judgment.
• Expect updated risk assessments, policies, procedures, clear documentation of decision-making, retrained staff, and robust systems for real-time FATF list integration and PCA information sharing.

Immediate steps compliance teams should be taking now

1. Gap analysis against the new rules.
2. Update systems and thresholds for sterling values and “unusually complex/large” logic.
3. Review PCA arrangements and information-sharing protocols.
4. Revise policies and risk frameworks.
5. Train and communicate with teams.
6. TRS portfolio review.
7. Board/Management sign-off on implementation plan.
8. Monitor exact commencement date.

These amendments are evolutionary rather than revolutionary, but they raise the bar for evidence and judgment.

SOURCES

1. Official Draft Legislation (full text & contents): https://www.legislation.gov.uk/ukdsi/2026/9780348281743/contents
2. Full PDF of the Draft Statutory Instrument: https://www.legislation.gov.uk/ukdsi/2026/9780348281743/pdfs/ukdsi_9780348281743_en.pdf
3. Official Explanatory Memorandum (PDF – detailed policy explanation): https://www.legislation.gov.uk/ukdsi/2026/9780348281743/pdfs/ukdsiem_9780348281743_en_001.pdf
4. Parliamentary SI page (laid 25 March 2026): https://statutoryinstruments.parliament.uk/instrument/8cBIMh8j
5. Regulation Tomorrow – Detailed overview of the draft: https://www.regulationtomorrow.com/2026/03/draft-money-laundering-and-terrorist-financing-amendment-regulations-2026/
6. TLT Solicitors – Practical insight on key changes: https://www.tlt.com/insights-and-events/insight/uk-government-strengthens-aml-and-crypto-controls-through-the-money-laundering-and-terrorist-financing-amendment-regulations-2026
7. VinciWorks – Compliance guide & factsheet summary: https://vinciworks.com/guide/money-laundering-terrorist-financing-amendment-regulations-2026-changes-compliance/
8. Zigram Tech – Full breakdown of all amendments: https://www.zigram.tech/resources/uk-mlr-amendments-2026/
9. GOV.UK RPC Opinion (impact assessment): https://www.gov.uk/government/publications/rpc-opinion-the-money-laundering-and-terrorist-financing-amendment-regulations-2026