Anti-money laundering guidance

CCAB guidance on anti-money laundering regulations is now available

CCAB guidance on anti-money laundering (AML) regulations is now available. The position over criminal record checks has been clarified and the good news for practitioners can be found below.

Practitioners can expect new request-for-AML information relevant to their approval over the coming weeks. This information is part of the beneficial owners, officers or managers (BOOMs) approval application (see below).

ACCA has made available free to members simple policies and procedures to help with the requirements.

Approval of BOOMs of a relevant firm

Regulation 26 of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) requires that no individual may be a BOOM of a relevant firm unless they have been approved as such by the relevant supervisory authority and the individual has not been convicted of a relevant offence (as set out in schedule 3 of the MLRs).

In order to comply with this requirement, relevant firms must submit an application to their supervisory authorities before 26 June 2018 requesting the approval of their BOOMs. During the coming weeks ACCA will send a request to all relevant firms supervised by ACCA to submit an application for the approval of their BOOMs.

It is the firm’s responsibility to ensure that only appropriate individuals act as BOOMs, and for this reason firms will be required to confirm as part of the application process that each of their BOOMs is ‘fit and proper’ and has not been convicted of a relevant offence.

An approval given by a supervisory authority will not be valid if the person approved has been convicted of a relevant offence.

Although at this point there is no legal requirement to conduct a criminality check for all BOOMs, some firms may wish to undertake these, and ACCA may request one for certain relevant firms on a risk-based approach as part of the approval process or an AML supervisory review.

Firms may also wish to review their ‘fit-and-proper’ forms and ensure that these are up-to-date. You can find one from the ACCA engagement letters in the 'related documents' section. 

BOOMs

The roles and positions that should be considered as beneficial owners, officers and managers are the following:

Beneficial owners

Principals in firms who own or control (directly or indirectly) more than 25% of the shares or voting rights in the firm, or who exercise significant control in practice.

Officers

  • Directors
  • Company secretaries
  • Chief executives
  • Partners in a partnership (including those in Scottish limited partnerships)
  • Members of a firm’s management committee or equivalent

Managers

According to regulation 3, a manager is ‘a person who has control, authority or responsibility for managing the business of [a] firm, and includes a nominated officer’. Therefore, in addition to the beneficial owners and officers, managers will include:

  • members of limited liability partnerships
  • nominated officers (money laundering reporting officer nominated to receive certain disclosures like internal suspicious activity reports)
  • senior managers

Trust or company service providers (TCSPs)

Regulation 56 of the MLRs requires that all relevant persons acting as TCSPs must be registered with either HMRC or the Financial Conduct Authority. HMRC has asked professional body supervisors to provide a list of their supervised relevant persons that act as TCSPs before 26 June 2018.  

A TCSP is any company or sole practitioner whose business is to:

  • form companies or other legal persons
  • provide a registered office, business address, correspondence address, administrative address for a company, partnership, other legal person or arrangement
  • act or arrange for another person to act as a:
    • director or secretary of a company
    • partner (or in a similar position) for other legal persons
    • trustee of an express trust or similar legal arrangement
    • nominee shareholder for another person

As part of the 2018 practising certificate (PC) annual renewal, ACCA asked PC holders to confirm whether their firms provide any services that fall within the definition of a TCSP. The response rate so far has been very low, given the importance of this regulatory requirement; relevant persons providing TCSP services that are not registered with HMRC before 26 June will be breaching the MLRs.

To ensure that ACCA-supervised firms have the best chance to comply with the law, a new request will be sent during the coming weeks to those relevant firms that have not yet provided details of their TCSP services so that these can be submitted as part of the BOOMs approval application. If you have not yet provided your TCSP information as part of your PC renewal, please do not use this submission to send the TCSP details; wait instead for the new request to be issued.