Annual Financial Crime Reporting Obligation Ext - Thistle Initiatives

Written by Thistle Initiatives - Compliance consultancy | Apr 8, 2021 11:00:00 PM

What has happened?

The FCA’s Policy Statement PS 21/4, issued in April 2021, summarises the regulator’s proposal to increase the number of firms that need to submit the annual financial crime report, the REP-CRIM. Following the consultation in August 2020, the FCA will increase the number of firms that need to submit a REP-CRIM report from approximately 2,500 to approximately 7,000. The policy statement proposes that additional firms and cryptoasset businesses should be brought into the scope of the report, based on their business activities and the potential money laundering risks.

What do you need to do?

Firms that will be brought into the scope of REP-CRIM for the first time will need to be prepared to submit the report when it is due. The following additional firms will be required to provide REP-CRIM information, irrespective of their total annual revenue;

Certain FSMA authorised firms falling within the scope of the MLRs which either hold client money or assets or carry on an activity that the FCA considers to pose a higher money laundering risk (for example, those firms dealing in investments as agent and managing investments). These are set out in the table under 16.23 in Appendix 1 to the PS and the activities include;

1. dealing in investments as agent,
2. dealing in investments as principal,
3. managing investments,
4. safeguarding and administering investments,
5. managing a UK UCITS, and
6. managing an AIF
7. or a firm that has reported total revenue of £5 million or more as at its last accounting reference date and that has permission to carry on one or more of the following activities:

- - advising on investments,
  - arranging (bringing about deals) in investments,
  - advising on pension transfers and pension opt-outs, and
  - credit-related regulated activity.

All payments institutions except for payment institutions that only carry on at least one of the following payment services:

1. Money remittance (these firms are supervised by HMRC for anti-money laundering purposes),
2. Account information services and/or payment initiation services,
3. A person with temporary PI authorisation that immediately before IP completion day was providing payment services other than through a branch in the UK or a UK-based agent

All electronic money institutions.
All Multilateral Trading Facilities (MTFs).
All Organised Trading Facilities (OTFs).
All cryptoasset exchange providers and custodian wallet providers.

The FCA has removed two activities from the REP-CRIM reporting obligation which it considers are outside the scope of the MLRs. These activities are ‘home finance mediation activity’ and ‘making arrangements with a view to transactions in investments’,

Firms being brought into scope will be required to submit their first REP-CRIM within 60 business days after their first Accounting Reference Date falling after 30 March 2022.

How can we help you?

If you’d like to know more about how we can help you with any aspect of your financial crime reporting arrangements, or any other regulatory compliance issues, our expert team is here to help.

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