In October 2025, His Majesty’s Treasury announced that the Financial Conduct Authority (FCA) would be taking over the anti-money laundering (AML) supervision of professional practice firms. The aim is to create a unified and consistent approach to supervision and a consistent approach across sectors.
In the first instance, the proposal requires parliamentary approval, and while the recent King’s Speech made no specific reference to such changes, it is anticipated that the details will be set out in the Enhancing Financial Services Bill. During the FCA’s financial crime conference (14 May 2026) Nikhil Rathi, Chief Executive of the FCA, also outlined that the government is set to legislate the transfer of anti-money laundering supervision of professional practice firms to the FCA.
What happens next?
The FCA is expected to engage with current regulatory bodies to understand their business models and sector-specific risks. Firms should not expect immediate change based on current indications.
- A consultation period of around 18 months is likely once approval is granted.
- Full implementation may take two to three years.
- We await information regarding transition and suspect that, as with previous FCA supervisory transitions, there will be an orderly phased approach, although no details have been published to date.
What stays the same?
It is important to note that the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLR 2017) remain in force. Firms should, however, monitor the proposed 2026 amendments, published on 26 March 2026 alongside a draft explanatory memorandum. The FCA has also clarified that its role will be limited to AML supervision. Professional conduct rules will remain with existing professional bodies.
What should firms do now?
While no new requirements have been issued, firms should take the opportunity to review their current AML frameworks, ensuring that they are up-to-date and reflective of the firm’s business.
- Review risk assessments to ensure they reflect current geopolitical risks.
- Assess technology and any AI tools the firm may use to confirm they operate as expected and are appropriately governed.
- Stay up to date with legislative developments, including proposed amendments.
- Carry out a robust review of AML policies and procedures with an element of testing to ensure that the firm’s policies and procedures are operating as expected. This can be performed by internal personnel, however, those individuals should be independent of day-to-day AML operations.
If you are unsure whether your AML framework meets current expectations and if you have not previously undertaken an independent AML review, now is the time to act. A proactive review can help identify gaps and ensure your firm is well prepared for regulatory change. Crowe can support this as part of its AML services. For more information, please get in touch.
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