The Financial Services Authority Reveals Its New Money-Laundering Role

Amanda Banks, Tax-news.com, London

26 January 2001

Director of the Financial Services Authority's (FSA) Complex Groups Division, Oliver Page, has announced the publication of the FSA's final anti-money laundering regulations. Speaking at the British Bankers' Association Money Laundering Conference this week, Mr Page, said: 'The FSA is on the point of reorganising in a way which we believe will better enable us to gain the benefits of a single regulator and better enable us to achieve the rather wider objectives we have been set by the new Financial Services and Markets Act.'

The aim of the FSA's new rules, explained Mr Page, is to draw to the attention of the UK banking and investment industry the importance of working in partnerships with the law enforcement agencies as well as each other and the previous anti-money laundering rules have been amended to reflect this. He stated: 'There can be a more effective approach to countering money-laundering ... We want, and need, industry to participate. Make no mistake the FSA and the industry has a difficult task ahead. The reduction of financial crime cannot be other than a challenge.'

Mr Page illustrated the point with data from a United Nations survey which estimated that $500 billion (2% of the global domestic product) is laundered annually, saying 'there are many varying accounts of the size of the problem but one thing is clear that it remains extensive ... without being more effectively checked, it will only continue to worsen.'

The rules, due to come into effect when the Financial Services and Markets Act is enforced, have now been overhauled to ehance the FSA's supervisory and regulatory role in the UK financial services industry. Mr Page commented: 'improving the way we supervised firms could make a material impact on the FSA’s new objective ... supervisory teams can readily integrate the task into those they already have, and also that without much, if any, additional resources, this greater supervisory focus would materially encourage better compliance with existing money-laundering requirements.'

Further amendments include the duties of the Money Laundering Reporting Officer (MLRO) who will have access to all information relating to investigations performed on either suspicion or actual activities of money laundering. A number of financial institutions had expressed concern over the MLRO's incapacity to delegate functions and this has also been amended under the FSA's new rules which now make it possible for the MLRO to delegate his functions whilst retaining responsibility for his operations.

Mr Page also updated the conference on the work of the FSA's Money Laundering Theme Project which aims to develop a risk based approach to money laundering that can be applied in a consistent way across the FSA.

The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence, promoting public understanding of the financial system, the protection of consumers and fighting financial crime. The Complex Group Division is responsible for the largest and most complex of the banking and investment banking groups active in the UK.

A full copy of Oliver Page's comments can be found on the FSA website at: http://www.fsa.gov.uk/pubs/speeches/sp72.html

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