FSA To Streamline Money Laundering Rules

by Robin Pilgrim, LawAndTax-News.com, London

31 January 2006

The UK's Financial Services Authority on Friday confirmed in a Policy Statement that it will press ahead with streamlining its anti-money laundering requirements for firms as part of its drive to simplify the FSA Handbook, and remove rules and guidance that are no longer needed.

The FSA revealed that it will remove the existing detailed rules on anti-money laundering controls in their entirety, replacing them with high-level requirements for firms to have their own risk-based controls on money laundering.

According to the financial services regulator:

"This reflects the FSA's wish to provide firms with greater flexibility to meet their anti-money laundering obligations and an increased focus on senior management responsibility to do so. This should encourage firms to target resources on activities which are most likely to result in deterring and detecting money laundering."

Philip Robinson, the FSA's Financial Crime Sector Leader, went on to explain that:

"The changes in our Handbook do not mean we are going soft on money laundering, they are part of delivering a more proportionate and effective regime to counter money laundering. We believe that firms will increasingly be able to target their resources where they will make the most difference in fighting crime."

Existing government regulations will remain in place, supplemented by industry guidance, which is currently being reviewed. The changes will come into effect at the beginning of March, but firms will have a transitional period until August 2006 to become fully compliant with the new rules.

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