Reminder to attest your AR details
From December 2023, if you have Appointed Representatives (ARs) you must confirm their details when completing your annual Firm Details Attestation (FDA).
You must attest the details of all ARs including:
• if they have more than one principal
• their details haven’t changed from last year or have been recently updated
FDAs must be completed within 60 business days of your Annual Referencing Date (ARD). Failure to report will incur a late return notification, £250 late return fee, and possible enforcement action.
Find out more about what AR information you need to report to the FCA and how.
Changes to reporting requirements for dual regulated firms
All firms must ensure that the FCA have their correct information by checking, amending (if required) and confirming their firms details at least annually, using Connect, in line with SUP 16.10 reporting requirements. Some of this information is on the Financial Services Register.
The FCA have written to all dual regulated firms (firms supervised by the FCA and the PRA) to inform them that they will need to attest to their firm details within 60 business days of their Accounting Reference Date (ARD), from 1 December 2023.
For more information, visit their website.
Alongside the Prudential Regulation Authority (PRA), the FCA are consulting on proposals to introduce a new regulatory framework on Diversity and Inclusion (D&I) in the financial sector.
Why they are consulting:
The FCA consider that greater levels of diversity and inclusion can improve outcomes for markets and consumers. In particular, by helping reduce groupthink, supporting healthy work cultures, improving understanding of and provision for diverse consumer needs and unlocking diverse talent, supporting the competitiveness of the UK’s financial services sector. The FCA have been clear that diversity and inclusion are regulatory concerns. Despite progress, research shows there is more to be done to improve diversity and inclusion in the financial sector.
The FCA’s proposed framework would establish minimum standards and give firms a better understanding of what is expected of them in this area from a regulatory standpoint. It would also help ensure greater consistency and transparency across the sector on firms’ approaches to diversity and inclusion.
The PRA has published its own proposals at the same time as the FCA’s CP.
Proceeds of fraud - detecting and preventing money mules
This month the FCA also published the key findings from their review of payment account providers’ systems and controls against money mule activity.
With fraud currently accounting for 40% of all crime, the ease with which fraudsters cash out proceeds through mule accounts continues to be a problem. Their review covered all aspects of firms’ response to mules, including controls at onboarding, monitoring and reporting.
Their report outlines examples of good practice, areas for improvement, and their expectations around how firms manage the risks of money mule accounts in a proportionate way.
Alongside the FCA’s publication the National Economic Crime Centre (NECC) and UK Financial Intelligence Unit (UKFIU) have also supplied the following information for us to share with you.
Money Mule Account Indicators
A key mechanism to cash-out the proceeds of crime (POC) is money mule activity. Money mule activity refers to a money laundering process in which POC are moved and transferred through personal and/or business bank accounts.
Mule accounts are defined as intermediary accounts used for money laundering, acting to create complex transaction chains in order to reduce detection by the financial services sector and law enforcement of an organised crime network (OCN) and/or individual offenders.
Mule accounts might be operated by a money mule, which is a person who transfers illegally acquired money on behalf of others, knowingly or unknowingly. Often, a mule account is controlled by a recruiter (sometimes known as a herder), potentially on a temporary basis, after the account holder has provided the recruiter with their account details, bank card, pin and/or passwords in exchange for a fee.
It is worth noting that OCNs and offenders are highly likely to use a combination of different methods to obtain as many mule accounts under their control as possible.
This list covers many of the common indicators that may suggest money mule activity in accounts, transactions and other financial activity. However, this list is not definitive and criminals will be dynamic in their deployment and development of new methods.
You can read the list here
If you identify activity that may be indicative of the activity on the list, and your business falls under the regulated sector, you may wish to make a Suspicious Activity Report (SAR). If you decide to make a report in this way you should adopt the usual mechanism for doing so. It will also help our analysis if you would include the SAR Glossary Code XXJMLXX within the text if submitting on SAR online or including 0701-NECC in the alert reference number section of the new SAR portal.
To learn more about the NECC and UKFIU perspective on money mules, listen to the money mules episode of the UKFIU podcast: https://spoti.fi/3tLm3BW
Check out the latest SARs in Action magazine, focusing on how the SARs regime, Regulators and Law Enforcement have responded to the money mules threat: https://bit.ly/45RfXxo