The FCA expects to begin taking over anti-money laundering supervision of legal, accountancy and trust and company service providers from late 2028 under government plans to overhaul the existing regime.

Around 60,000 businesses and sole practitioners are expected to come within the expanded supervisory framework, with the transition taking place in phases and due to be completed around 2030.

The changes will transfer responsibility for anti-money laundering (AML) and counter-terrorist financing (CTF) supervision from professional body supervisors and HM Revenue and Customs to the FCA.

The regulator said there would be no immediate change for affected businesses because the reforms depend on new legislation being passed. Firms should continue to follow their existing AML arrangements and deal with their current supervisor in the meantime.

LEGISLATION NEEDED BEFORE TRANSITION

The government intends to implement the reforms through the Financial Services Bill and secondary legislation, including amendments to the Money Laundering Regulations.

Under the FCA’s current timetable, work with stakeholders will continue during 2026. The regulator expects to complete a review of its operating model in 2027 following the anticipated legislation.

A phased transfer of supervision is then expected to begin in late 2028, by which point the FCA plans to have its initial systems built and tested. The remaining professional body-supervised businesses are expected to transfer by 2030.

The estimated population affected includes around 34,000 accountancy businesses currently overseen by professional bodies and 7,500 law businesses under similar supervision. A further 18,000 accountancy businesses and trust and company service providers are supervised by HMRC.

The FCA cautioned that the figures were estimates and could change as its transition plans are developed.

FCA PLANS RISK-BASED APPROACH

The regulator said its expanded supervision would be risk based, targeted and proportionate, with additional sector-specific expertise developed for the legal and accountancy professions, including the Scottish and Northern Irish legal sectors.

Professional bodies will retain their existing responsibilities for conduct matters outside AML and CTF supervision and are expected to continue working with the FCA on financial crime issues affecting their members.

The Office for Professional Body Anti-Money Laundering Supervision will also remain in place during the transition. Once the transfer has been completed, the FCA said OPBAS would close.

Initial costs for establishing the new supervisory function will be met through the Economic Crime Levy. Once operational, the regime will be funded by fees charged to the businesses it supervises, with the FCA planning a consultation on its proposed charging arrangements before assuming its expanded role.

Businesses already supervised by the FCA under the Money Laundering Regulations will not be affected by the transfer.