The FCA has published its Business Plan for 2016/17, setting out its focus for the next 12 months. Combatting financial crime and money laundering remains one of the FCA’s top priorities, together with promoting appropriate cultures and behaviours in regulated firms.

The key messages in these areas are as follows:

  • The FCA is rolling out the Financial Crime Annual Data Return (the “Return“), proposed in its December 2015 consultation paper. The Return will be used by the FCA to systematically collect data about financial crime risks from those firms subject to the Money Laundering Regulations 2007. For example, the Return will ask firms about the countries in which they operate which they perceive to be high risk, and the resources they allocate to tackling financial crime. This data will enable the FCA to target its supervisory work on those firms that face higher inherent financial crime risk.
  • We can see the theme of “constructive deterrence” clearly in the Business Plan, as the FCAcontinues to seek to prevent things from going wrong in the first place through proactive engagement. The FCA is, however, unequivocal that, where it finds firms with material weaknesses in their anti-money laundering controls, it will take enforcement action to send a deterrent message to the industry. This message is perhaps unsurprising given the £72 million fine imposed by the FCA on Barclays at the end of last year for anti-money laundering failures.
  • The FCA will work with banks to assist them in taking a proportionate and strategic approach to de-risking (i.e. the steps taken by banks to prevent and detect money laundering). The Business Plan recognises that de-risking is making it difficult for certain categories of consumers to obtain banking facilities, and the FCA is undertaking a de-risking impact assessment to ensure the approach is proportionate, measured and effective.
  • The FCA continues to place poor conduct at the heart of its work, linking poor conduct with poor culture. The Business Plan acknowledges that the recently introduced Senior Managers and Certification Regime is aimed at increasing individual accountability at the most senior levels, and re-iterates (per HM Treasury’s announcement of October 2015 that this accountability regime will be rolled out to all FSMA firms.

Find more articles in April’s edition of Corporate Crime Matters