UK FCA OPBAS 2022/23 PBS Reports

On May 10, UK FCA issued letter concerning regulation 46A reports.

  • FCA updated its Office for Professional Body Anti-Money Laundering Supervision (OPBAS) webpage to add supervisory update letter from UK Treasury and OPBAS.
  • Follows UK FCA Mar. 2023 issued letters on regulation 46A reports, see #167160.
  • Background
  • Professional body supervisors (PBSs) must under Money laundering regulations 2017 regulation 46A (MLR 2017 Reg. 46A) publish annual reports detailing their AML/CFT supervisory activities, first were published Nov. 2021, Treasury, OPBAS review these.
  • OPBAS issued guidance to assist PBSs by providing clarity on its expectations on content and detail of the annual reports, has reviewed 3rd set of reports against this.
  • The guidance was added to OPBAS sourcebook chapter 11 in Jan. 2023, see #145669.
  • 2022/23 Reports and Expectations
  • OPBAS found continued improvement in report content and quality across the 3 cycles of production, though there was inconsistency in some individual PBS reports.
  • Finds the reports helpful background, but not a standalone measure to indicate the effectiveness of a PBS as supervisor, should be read in conjunction with other reports.
  • Saw evidence of all PBSs acting on previous OPBAS feedback, over half of reports found to be clearer and improved, and none had declined in overall quality.
  • For first time, several were assessed to effectively meet all the suggested criteria.
  • Improvement in describing type and number of measures taken to monitor, enforce compliance in supervised populations, forewords and remit content consistently good.
  • Evidence of improved PBS assessment of emerging money laundering and terrorist financing threats and trends in sectors, helpful links to relevant resources that they have drawn on in making their risk assessments to support risk-based approach.
  • PBSs continue to make good use of graphs and visual aids to make content clearer, use of case studies more in evidence, OPBAS encourages continued inclusion in future.
  • In the 2022/23 reports some have identified weaknesses within their supervised populations, described actions taken to address these, these demonstrate proactivity.
  • Areas for Improvement
  • Reports could benefit from more analysis of underlying reasons for compliance failures and deficiencies in supervised populations and reflective commentary on opportunities to improve PBS supervisory approaches to address these, gap analysis could support.
  • OPBAS encourages even more information on compliance levels within PBSs' supervised populations, e.g. statistics on type/number of measures taken, outcomes.
  • Should be increased focus in reports outlining actions taken by PBSs in response to inadequacies or concerns identified in quality of suspicious activity reports (SARs).
  • OPBAS' expectations in these areas are set out in its sourcebook, PBSs are encouraged to consider and adopt these aspects in future reports, to ehance quality and value.
  • Next Steps
  • OPBAS will provide detailed feedback to each PBS to discuss individual areas for improvement intended to assist in preparation for next reporting cycle 2023/2024.
  • Will engage/feedback more intensively with PBSs who produced least effective reports.

Regulators UK FCA
Entity Types B/D; Bank; BS; CNSM; Depo; Exch; IA; Ins; Inv Co; OTC
Reference PR 5/10/2024; Lt 4/11/2024; Citation: OPBAS sourcebook; MLR 2017 Reg. 46A;
Functions AML; Anti-Bribery; Compliance; Legal; Record Retention; Reporting; Risk; Treasury
Countries United Kingdom
Category National Regulator
Products Banking; Clearing; Derivatives; Fund Mgt; Insurance; Securities
Regions EMEA
Rule Type Guidance
Rule Date 5/10/2024
Effective Date 5/10/2024
Rule Id 211644
Linked to Rule :167160
Reg. Last Update 5/10/2024
Report Section UK

Last substantive update on 05/14/2024